The government will continue its bank merger and restructuring programme in the 2026–27 fiscal year. To support these efforts, Tk 367.06 billion (36,706 crore) has been allocated in the proposed budget under the category of shares and equity. In the current 2025–26 fiscal year, expenditure in this sector has been revised to Tk 415.58 billion (41,558 crore).
Presenting the budget for FY2026–27 in the parliament today, Thursday, Finance Minister Amir Khasru Mahmud Chowdhury said that restoring discipline in the banking and financial sectors and rebuilding public confidence in them are among the government's key medium-term priorities for economic recovery and sustaining investment flows.
To achieve these goals, measures are being taken to reduce non-performing loans, ensure transparency in loan approvals and rescheduling processes, and strengthen accountability in bank management. A risk-based supervisory framework will be introduced to rebuild the financial strength of weak banks, while recapitalisation and management reform initiatives are being undertaken where necessary.
In his budget speech, the finance minister said the government is being compelled to spend more than Tk 400 billion (40,000 crore) in the current fiscal year on bank recapitalisation. He added that political interference in banking operations will be eliminated and that amendments to relevant laws will be introduced to free banking governance from family influence. The supervisory powers of the central bank will also be strengthened to improve the effectiveness of policy implementation in the financial sector.
The government plans to ensure risk management, capital adequacy and corporate governance in the banking sector in line with international standards so that financial institutions can become stable and competitive over the long term. At the same time, greater use of technology in the financial sector will be encouraged to promote digital finance, fintech and innovative financial services.
Meanwhile, according to sources at Bangladesh Bank, five Shariah-based banks that fell into crisis due to irregularities and corruption have been merged to form Sammilito Islami Bank. The merged institutions are First Security Islami Bank, Union Bank, Global Islami Bank, Social Islami Bank and EXIM Bank.
The new entity will operate as a state-owned Shariah-based commercial bank. It has an authorised capital of Tk 400 billion (40,000 crore) and a paid-up capital of Tk 350 billion (35,000 crore), of which the government has provided nearly Tk 200 billion (20,000 crore).
In addition, five other financial institutions are currently undergoing liquidation proceedings, while several more banks may need to be merged. Against this backdrop, the government has allocated nearly Tk 370 billion (37,000 crore) in the proposed budget for banking sector restructuring.