The decision by Bangladesh Bank to gradually withdraw administrators from the five Islamic banks being consolidated into Sammilito Islami Bank is a welcome step. As the new management takes charge and the administrators are expected to leave the remaining banks by August 15, the merger is entering a new and more critical phase.
The five banks—EXIM Bank, Social Islami Bank, First Security Islami Bank, Global Islami Bank and Union Bank—were brought together because of serious financial and governance weaknesses. Their consolidation is therefore not simply an administrative exercise; it is an attempt to address deep-rooted problems in the banking sector and create a stronger and more sustainable Islamic banking institution.
However, the withdrawal of administrators should not mean the withdrawal of Bangladesh Bank’s close supervision.
The central bank must continue to closely monitor the operation, governance and financial performance of Sammilito Islami Bank. A merger, by itself, cannot be considered a solution to the problems that forced five troubled banks into consolidation in the first place. The real test will be whether the new institution can become financially sound, professionally managed and capable of restoring the confidence of its customers.
Bangladesh has witnessed bank mergers and restructuring exercises in the past, but not all have produced the desired results. This experience should serve as an important lesson. Combining weak institutions does not automatically create a strong one. Unless governance is improved, bad loans are recovered, capital is strengthened and accountability is ensured, the problems of the old institutions could simply be transferred to the new entity.
The technological integration of the five banks is another major challenge. Bringing together banking software, accounting systems, international transaction platforms and other IT infrastructure must be done carefully. Any disruption could directly affect customers and further undermine confidence. The authorities should therefore give priority to uninterrupted banking services during the transition.
But above all, restoring depositor confidence must be the central objective of the merger.
Customers must feel that their money is safe and that they can withdraw their funds when necessary without facing unnecessary restrictions or uncertainty. At the same time, depositors should regain the confidence to place their savings with the new institution without fear. Until that confidence returns, the merger cannot be regarded as a complete success.
This is where Bangladesh Bank has a crucial responsibility. It should establish clear and measurable benchmarks for the new bank covering liquidity, capital adequacy, loan recovery, corporate governance, risk management, customer service and technological integration. Regular monitoring should continue even after the formal merger is completed.
The management of Sammilito Islami Bank must also understand that public confidence cannot be restored through announcements alone. It must be earned through transparent management, efficient services, responsible lending and consistent financial performance.
The objective should therefore be bigger than completing the five-bank merger. The goal must be to build a sustainable, credible and professionally managed Islamic bank.
Bangladesh Bank deserves appreciation for taking this difficult restructuring initiative. But the real work begins now. The success of Sammilito Islami Bank will ultimately be measured not by whether five banks have been brought under one name, but by whether depositors once again trust the institution with their money.
Complete the merger, but do not stop there. Ensure sustainability, restore confidence and build a bank that can stand on its own.
