HC rejects writ against merger of five troubled Islamic banks
During the hearing, the state argued that the merger was executed under the Bank Resolution Ordinance 2025, which contains no provision for compensating shareholders
The High Court today (8 December) rejected a writ petition challenging the legality of the government's decision to merge five financially distressed private Islamic banks into a single entity.
The bench of Justice Fahmida Quader and Justice Md Ashif Hasan passed the order after a brief hearing, Barrister Sayed Mahsib Hossain, counsel for the petitioner, confirmed The Business Standard.
Additional Attorney General Mohammad Arshadur Rouf opposed the petition on behalf of Bangladesh Bank.
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The writ, filed on 18 November by general investor Shahidul Islam, named the Bangladesh Bank governor, finance secretary and other relevant officials as respondents.
It sought directives to protect the interests of general shareholders and ensure proportionate share allocation in the proposed Sammilito Islami Bank following the merger of First Security Islami Bank, Union Bank, Global Islami Bank, Social Islami Bank and EXIM Bank.
During today's hearing, the state argued that the merger was executed under the Bank Resolution Ordinance 2025, which contains no provision for compensating shareholders. Therefore, Rouf said, the petition had no legal merit.
he writ claimed that the unified bank was being formed without safeguarding shareholder rights or issuing shares to existing investors. It also alleged that the central bank undertook the merger despite being unprepared, citing long-standing sectoral weaknesses including mismanagement, politically motivated lending and record-level non-performing loans.
Barrister Hossain said news reports indicated that general shareholders of the merged banks would not receive new shares, despite assurances that depositor assets would remain protected.
He argued that the central bank's stated position – that investors must absorb losses under restructuring – effectively leaves ordinary shareholders without recourse.
He termed the stance a violation of shareholder interests and constitutional guarantees.
On 1 December, former senior secretary Dr Mohammad Ayub Miah was appointed chairman of Sammilito Islami Bank.
Bangladesh Bank had earlier granted preliminary approval for Sammilito Islami Bank on November 9, following an application from the Ministry of Finance.
