MERGER AFTERSHOCKS16,000 bank staff hit by job fears

For Torikul Islam, an employee of Social Islami Bank PLC (SIBL), every workday begins with anxiety and ends with unanswered questions.

“I started my career with Mercantile Bank and later joined SIBL for a better opportunity,” he said, adding, “After 17 years in banking, I thought I was on a stable path. Now I’m worried about my future – my son studies at a private university, my daughter has just finished her HSC. If I lose my job at this age, what will I do?”

Torikul is among more than 16,000 officers and employees facing deep uncertainty following the merger of five struggling banks: Social Islami Bank, First Security Islami, Exim, Global Islami, and Union Bank.

The government has appointed administrators to oversee the transition, but no decision has yet been made regarding the future of the employees.

Bangladesh Bank (BB) Governor Ahsan H Mansur has assured staff that lower-level employees will not lose their jobs – at least within the first three years of the merger.

According to central bank sources, administrators have been tasked with ensuring smooth operations and completing the consolidation process. For now, the banks continue to conduct regular activities – including transactions, cheque settlements, letters of credit and remittance services – under their existing names.

Yet insiders say anxiety is growing as restructuring plans begin to take shape. “We’ve been told to keep working as usual,” said a mid-level officer at one of the merged banks, “but no one can say what the new structure will look like, or how many of us will remain.”

This is Bangladesh’s first major banking consolidation, an effort the government hopes will clean up the sector, reduce the number of weak banks, and restore depositor confidence. But for thousands of employees like Torikul, the future remains uncertain.

The five Islamic banks set for merger received initial approval, known as a Letter of Intent (LoI), from the Bangladesh Bank (BB) on Sunday to operate under the name United Islami Bank.

The LoI was sanctioned during a special virtual board meeting of the central bank.

The merged entity will see Nazma Mobarek, secretary of the Financial Institutions Division under the finance ministry, appointed as the new chairman of its board, officials said. The board will also gain seven new directors: five representing the government and two from the private sector.

The central bank's decision followed an application submitted by the Financial Institutions Division last Wednesday seeking the LoI and the final licence.

A senior Bangladesh Bank official told the media, “The LoI was approved during an online board meeting presided over by Governor Ahsan H Mansur.”

Five banks, one fate

The five banks involved in the merger collectively employ more than 16,000 people across Bangladesh, according to data available on their official websites.

Social Islami Bank PLC (SIBL), established in 1995, is one of the country’s leading Shariah-based private banks. It employs about 4,000 people through 180 branches, 236 sub-branches, and 375 agent banking outlets nationwide.

First Security Islami Bank PLC (FSIB), founded in 1999 and converted into a full-fledged Islamic bank in 2009, employs around 4,287 officials, operating through 206 branches, 178 sub-branches, and 109 agent outlets.

Union Bank PLC, incorporated in 2013 under the Companies Act 1994, employs 2,073 staff across its head office and branch network.

Global Islami Bank PLC, formerly NRB Global Bank Limited, adopted full-fledged Islamic banking in January 2021. It currently employs about 2,418 people.

Export Import Bank of Bangladesh PLC (EXIM Bank), established in 1999, employs approximately 3,493 staff across its nationwide branch network.

Fear spreads as restructuring begins

When Shafiqul Islam joined Union Bank PLC in 2017, he never imagined his career would be at risk.

“I served honestly for seven years,” he said. “But after the merger announcement, we’re living in fear. Every day we hear rumours about layoffs – no one knows what’s next.”

“I joined the bank to build my life,” he added quietly. “Now I’m just waiting – for a decision that could end my career overnight.”

Tobibur Rahman, who has been with Exim Bank since its inception, expressed frustration over the deadlock.

“After so much turbulence, we hoped the merger would bring stability. But nothing has improved. We’re just waiting without clarity – how many jobs will be cut, what benefits will remain, and whether management will change entirely," he said.

Layoffs already underway

Even before the merger process began, the sector had seen significant job losses.

Industry estimates suggest that more than 6,500 bankers have already lost their jobs since the political transition earlier this year.

Union Bank, controlled by the S Alam Group, terminated 262 officials last November. Social Islami Bank PLC laid off 579 officers during the same period. First Security Islami Bank PLC dismissed 545 officials earlier this year.

Central bank’s assurance

Bangladesh Bank Governor Ahsan H Mansur has reiterated that lower-level employees will not be laid off within the first three years of the merger. However, mid- and senior-level officials remain anxious.

“Bangladesh Bank guidelines clearly state that no employee can be terminated within three years of a merger,” said Arief Hossain Khan, BB executive director and spokesperson.

“However, if irregularities are discovered in recruitment or performance, necessary action may be taken following due process. There is no scope for arbitrary dismissal or selective exclusion.”

Analysts question the process

Economists say the crisis has deep roots. Over the past decade, several new banks were allegedly approved on political grounds, and recruitment often bypassed merit-based standards – creating inefficiency and fragility.

Experts argue that while mergers are necessary to reform weak banks, the process must be managed with transparency and fairness.

“Many of these banks were born out of political favouritism rather than financial need,” said Mustafa K Mujeri, executive director of the Institute for Inclusive Finance and Development (InM).

“As the government now pushes for accountability, those who entered through irregular channels are being filtered out. Unfortunately, some innocent employees are also suffering,” he said.

Dr Zahid Hussain, former lead economist at the World Bank’s Dhaka office, added that the central bank had held meetings with each troubled bank, asking them to submit individual resolution plans.

“Although forced mergers are legally possible, proper due process must be followed,” he said, adding, “But it’s unrealistic to assume that all branches and staff will remain intact after the merger.”

He also questioned why liquidation was not considered as an alternative, warning that employees and depositors may still face risks despite official assurances.

Mergers never easy for staff

Veteran banker Md Arfan Ali, former president and managing director of Bank Asia, said mergers are always challenging for employees.

“In most cases, one role ends up being handled by two people, creating overlaps and internal competition,” he explained.

“This often leads to power struggles among senior and mid-level staff. Ultimately, only the most skilled or politically secure employees survive. But while some may face difficulties, if they work hard, the new bank can perform well – though it will take time,” he said.