Dhaka, Nov. 5 -- Bangladesh Bank (BB) has dissolved the boards of directors of five financially distressed Shariah-based banks, effectively declaring them 'ineffective', as part of a move to merge them into a single state-owned Islamic bank.

The decision follows a proposal from Bangladesh Bank and a recommendation from the Financial Institutions Division (FID).

The banks involved are First Security Islami Bank PLC, Global Islami Bank PLC, Union Bank PLC, EXIM Bank PLC and Social Islami Bank PLC (SIBL).

Separate letters were issued to the banks on Wednesday, notifying them that their Boards' activities have been suspended with immediate effect. The banks will now operate under the Bank Resolution Ordinance.

Bangladesh Bank officials sa...