Bank merger cuts salaries of 5 Islamic banks

Administrators overseeing the merger of five Shariah-based banks have taken steps to reduce salaries, allowances and other benefits for officers and employees as part of the integration process.

The banks facing financial strain are Exim Bank, First Security Islami Bank, Global Islami Bank, Union Bank, and Social Islami Bank.

Together, they employ around 16,000 staff. To support operational costs, Bangladesh Bank provided Tk 3.5 billion in liquidity to these banks on Thursday.

Mohammad Shahriar Siddiqui, assistant spokesperson of Bangladesh Bank said on Thursday that as an emergency measure, proportional cuts in pay and benefits are being considered.

“Now the focus is on reducing expenses. How much the salaries are cut is secondary; ensuring employees retain their jobs is more important,” he said.

He added that once the new merged bank assumes responsibility for the five institutions, it will establish a unified payment structure. Until then, a standardised salary plan is being prepared for all five banks, though the timeline for finalising and implementing it has not yet been confirmed.

Currently, each bank follows its own pay structure, with salaries for identical positions varying across institutions. Administrators are working to set a uniform salary scale for the same positions across all banks to reduce operational expenses.

The government is forming the new “Sammlito Islami Bank” to take over these five banks. Bangladesh Bank has issued a Letter of Intent (LOI) for the state-owned Shariah-based bank.

On Nov 5, all shares of the five banks were declared null, and administrators replaced the boards and management teams.

Sammlito Islami Bank will have a total capital of Tk 350 billion, with the government contributing Tk 200 billion. Once operational commercially, the five banks will gradually be integrated into the new entity.