Bangladesh Bank (BB) will soon send a proposal to the government detailing plans to merge five financially troubled Islamic banks, marking the formal start of the sector’s long-anticipated consolidation.

The letter will outline the funds needed for the process and the treatment of the banks’ shares, following a decision at a central bank meeting on Monday.

Governor Ahsan H Mansur told a press conference that discussions were ongoing and an official announcement would follow. He assured depositors their funds would be safe.

Under the Bank Resolution Ordinance 2025, BB has decided to merge Social Islami Bank, Global Islami Bank, First Security Islami Bank, Union Bank, and EXIM Bank. Four of the banks’ chairmen attended the meeting, while EXIM Bank Chairman Md Nazrul Islam Swapan said he was not invited and opposed the plan, citing stronger finances than the others.

A BB spokesperson said the meeting was aimed at expediting the merger. The government is expected to issue letters to the banks within days, and an oversight office will be set up at Sena Kalyan Bhaban in Motijheel.

The five banks, which have sought fresh liquidity support, were refused additional funds during the merger process. BB’s decision follows a forensic audit by KPMG and Ernst & Young, which found their non-performing loans were four times higher than reported.

Once the merger begins, the banks will be placed under temporary government control.