Newly appointed Bangladesh Bank governor Md Mostaqur Rahman on Tuesday said that the ongoing bank merger process will continue and instructed administrators to intensify recovery of default loans.

He made the remarks at a meeting with administrators of five banks currently under a merger initiative, BB officials said.

The meeting was held at Bangladesh Bank on Tuesday, days after Mostaqur Rahman assumed office as governor on February 26, replacing Ahsan H Mansur.

The five banks being merged into Sammilito Islami Bank PLC were First Security Islami Bank, Global Islami Bank, Social Islami Bank, EXIM Bank and Union Bank — had long struggled with financial weakness and governance failures.

The Bangladesh Bank issued its licence on December 1 under the Banking Resolution Ordinance, 2025, which allows the regulator to merge failing banks.

Bangladesh Bank has appointed administrators to oversee the process, and central bank officials are currently managing the institutions.

The new bank starts with a paid-up capital of Tk 35,000 crore, including Tk 20,000 crore from the government and Tk 15,000 crore from institutional depositors’ shares.

Following the political changeover on February 12, uncertainty emerged over the future of banking reforms, including the consolidation of weak banks initiated under the previous administration.

The new governor’s statement signals continuity in restructuring efforts.

Islamic banks were among the worst affected during the previous government, facing large-scale loan irregularities and governance failures.

Several conventional banks also experienced significant lending anomalies. As a result, a substantial portion of loans in these institutions turned non-performing, weakening capital and eroding depositor confidence.

EXIM Bank was controlled by former Bangladesh Association of Banks chairman Nazrul Islam Mazumder, while the other four banks were linked to S Alam Group chairman Saiful Alam, a controversial businessman from Chattogram.

Both individuals were widely known for their close association with the ousted prime minister Sheikh Hasina.

Governor Mostaqur Rahman told administrators on Tuesday that alongside structural consolidation, recovering classified loans must remain a priority.

He stressed that all available legal and alternative measures should be used to improve recovery.

He also instructed banks to facilitate the reopening of viable but closed factories in line with existing rules, aiming to restore production and employment.

The merger is expected to reduce systemic risk by preventing further deterioration in weak banks. At the same time, reopening operational factories could help revive credit flows, protect jobs and support industrial output.