Bangladesh Moves to Recover Laundered Funds from Weak Islamic Banks

The directive came from the governor of Bangladesh Bank during a meeting held at its headquarters. Administrators of five banks—EXIM Bank, Social Islami Bank, First Security Islami Bank, Global Islami Bank, and Union Bank—were present.

According to officials, the governor emphasized the urgency of starting legal proceedings abroad to trace and bring back siphoned funds. He also stressed the need to recover domestic assets to help restore stability in these banks.

Mounting Loan Defaults

Data from Bangladesh Bank shows that, as of December, the five banks held total loans amounting to Tk 196,827 crore. Of this, Tk 165,781 crore—about 84.23%—has turned into non-performing loans (NPLs), highlighting the severity of the crisis.

Among the five:

• EXIM Bank is in relatively better condition, with 62.45% of its Tk 53,491 crore loans classified as defaulted.
• Union Bank is in the worst position, with 97.64% of its Tk 28,017 crore loans defaulted.
• First Security Islami Bank has 96.43% of Tk 62,344 crore in default.
• Global Islami Bank stands at 96.27% defaulted loans.
• Social Islami Bank has Tk 38,381 crore in loans, with 38.38% classified as non-performing.

Push for Recovery

The central bank’s move signals a stronger stance against financial misconduct and capital flight. By engaging international legal support, authorities aim to track illicit fund flows and recover assets—an important step toward rebuilding confidence in the banking sector.