Five merged banks under special forensic audit; finance minister vows action against those responsible
The government says the audit is part of a broader banking sector reform aimed at restoring depositor confidence, strengthening governance and addressing financial irregularities through a new resolution framework
Highlights:
- Forensic audit underway into five merged Islamic banks
- Govt vows action against those responsible for irregularities
- Five banks merged under new resolution framework
- Protected deposit insurance limit doubled to Tk2 lakh
- Bank boards restructured to restore governance
The government has launched a special forensic audit into investment-related irregularities at five merged Shariah-based banks, with those found responsible facing administrative and legal action, including termination of their appointments, Finance Minister Amir Khosru Mahmud Chowdhury told parliament today (12 July).
The finance minister disclosed the information while responding to a written question from Chapainawabganj-3 MP Md Nurul Islam during the question-and-answer session in the Jatiya Sangsad.
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He said the government is implementing a comprehensive bank resolution framework to curb political interference, loan fraud and financial irregularities in the banking sector.
As part of the initiative, five troubled Shariah-based banks have been merged to form Sammilita Islami Bank PLC, he said.
In his question, the MP referred to allegations that widespread looting, anonymous loan fraud and institutional corruption during the previous government's tenure had weakened the country's banking system.
He also sought to know what measures the government had taken to ensure good governance amid fresh allegations of political and administrative interference in several Shariah-based and private banks, including Islami Bank Bangladesh PLC.
Responding, the finance minister said the government had established a structured and multi-dimensional resolution framework to restore stability to the financial sector, which he described as the backbone of the economy.
He said the framework is backed by the Bank Resolution Act, 2026.
Under the law, Export Import Bank of Bangladesh (EXIM Bank) PLC, First Security Islami Bank PLC, Global Islami Bank PLC, Social Islami Bank PLC and Union Bank PLC have been merged to form Sammilita Islami Bank PLC.
The merger has protected the interests and claims of all depositors of the five banks through the new entity, he said.
The minister added that the maximum amount of protected deposits under the Deposit Protection Act, 2026 has been increased from Tk1 lakh to Tk2 lakh.
He also said depositors of banks currently under resolution are receiving their money in phases under Bangladesh Bank's resolution scheme. Depositors of finance companies, who were previously outside the scope of deposit protection, have also been brought under the new protection framework.
The finance minister said banks operate primarily with depositors' money, making the protection of depositors' interests the primary responsibility of their boards of directors.
However, he said, large-scale loan and investment irregularities and activities contrary to the interests of banks and their depositors had weakened the financial condition of several banks, undermining public confidence and threatening broader financial stability.
In response, the government dissolved the boards of directors of 11 banks at the end of 2024 under Sections 47(1) and 48(1) of the Bank Companies Act, 1991 (as amended up to 2023).
The boards were subsequently reconstituted under Section 45 of the Act through the appointment of Bangladesh Bank-nominated and independent directors.
The finance minister said the boards of five more banks were restructured in March, August and December 2025.
