HC upholds decision to merge five shariah-based banks

The High Court today upheld the interim government's decision to merge five shariah-based banks with Sammilito Islami Bank Limited, summarily rejecting a writ petition that challenged the legality of the move.

The bench of Justice Fahmida Quader and Justice Md Ashif Hasan passed the order after hearing arguments on the petition filed by Shahidul Islam, a general investor in the stock market.

Barrister Sayed Mahsib Hossain appeared for the petitioner, while Additional Attorney General Md Arshadur Rouf opposed the petition during the hearing.

Speaking to The Daily Star, lawyer Hossain said the court rejected the petition on the ground that the Bank Regulation Ordinance, 2025 - under which the merger took place - contains no provision to safeguard shareholders' interests in the event of a merger.

As a result, the government's decision will remain in force, he added.

He also said his client has not yet instructed him to move an appeal before the Appellate Division

Islam submitted the petition on November 18, seeking a rule on why the authorities should not be directed to protect the interests of existing shareholders of the five banks – First Security Islami Bank, Union Bank, Global Islami Bank, Social Islami Bank and EXIM Bank.

On October 9, the interim government approved the consolidation of the five listed banks, under which their assets and liabilities are to be merged into the country's largest state-owned Islamic bank.

Shareholders of the banks will not receive any shares in the new bank, as the value of assets tied to their existing shareholding is already negative, regulatory officials said prior to the merger.