By Asif Showkat Kallol (Dhaka Bureau)
A major structural transformation has begun in Bangladesh’s banking sector, which has been plagued by years of liquidity shortages and institutional governance failures. In one of the largest economic interventions in the country’s history, the state has fully initiated the process of operationalising the newly formed, state-monitored ‘Combined Islami Bank PLC’ by merging five severely distressed private Islamic lenders.
Behind this massive realignment of financial power lies a challenge greater than mere corporate restructuring for policymakers: upholding human rights and restoring fractured public trust.
The Fight for Human Rights and Restoring Citizen Savings
In any financial crisis, the primary victims are everyday depositors who entrust their life savings to institutions for a secure future. For a long time, customers of these five banks faced severe psychological and social distress, unable to access their own hard-earned money.
Speaking in Parliament on Wednesday, Finance Minister Amir Khasru Mahmud Chowdhury announced that the deadlock has begun to ease. Under the Bank Resolution Scheme 2025, EXIM Bank, First Security Islami Bank, Global Islami Bank, Social Islami Bank, and Union Bank have been consolidated into a single entity.
Most reassuringly, affected citizens have already started receiving their funds under the Deposit Protection Act 2026. Initially, depositors are receiving up to Tk 200,000 each. The government maintains that this direct intervention is aimed at preventing widespread financial instability while ensuring the protection of ordinary savers from being crushed by institutional failures.
‘Leaving distressed banks to navigate the crisis independently would mean abandoning the future of millions of ordinary citizens. This merger is not about saving capitalist interests; it is a state responsibility to protect the rights of depositors’, Economic Analysis Desk, Dhaka Bureau.
A Major Litmus Test: Institutional Complexity vs. Human Relief
While merging banks appears seamless on paper, its ground-level execution remains a monumental task. The newly formed Combined Islami Bank is currently undergoing a complex technological and psychological overhaul. Authorities are simultaneously tasked with integrating five distinct corporate entities, including:
* Consolidating core banking systems and IT platforms.
* Harmonizing extensive branch networks.
* And most sensitively, restructuring the workforce while safeguarding the livelihoods of thousands of bank employees.
While a Chairman has assumed office and additional board members have been nominated, key leadership positions- including the Managing Director (MD), Chief Financial Officer (CFO), and Chief Technology Officer (CTO)- remain in the recruitment pipeline. Meanwhile, Bangladesh Bank has sent a clear warning: institutions failing to improve their financial health could face similar intervention under the Bank Resolution Act 2026.
A Shift from Capitalism to Public Interest?
True to Pressenza’s core values of prioritizing human dignity and social protection, this move by Bangladesh offers a distinct departure from conventional free-market capitalist frameworks. Typically, failing private entities are left to market forces or liquidation, often leaving depositors empty-handed. Instead, Bangladesh has chosen a path of active state oversight, mandatory consolidation, and direct depositor protection.
However, the ultimate test is still underway. The true success of this initiative will not be measured by seamless IT integration or executive appointments. Real success will be realized when an ordinary citizen can walk up to a bank counter, withdraw their savings without harassment, and fully rebuild their faith in the financial system.
For now, the queues of depositors reclaiming their funds at Combined Islami Bank branches are more than just financial transactions; they represent a vivid picture of ordinary people reclaiming their economic security and peace of mind.
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The Writer:
Asif Showkat Kallol: Works for a German-based online outlet, The Mirror Asia, as Head of News and is a Contributor at Pressenza- Dhaka Bureau.
