, Sept. 20 -- Bangladesh Bank's plan to merge five weak Islamic Shariah-based banks into a single state-owned entity has been hailed as a bold attempt to stabilise the banking sector, but experts warn the move faces enormous challenges and could take years to achieve meaningful results.

The five banks-First Security Islami Bank, Union Bank, Global Islami Bank, Social Islami Bank, and Exim Bank-are mired in crisis, with non-performing loans (NPLs) now at a staggering Tk1,47,000 crore, or 77 per cent of their total loans. Union Bank tops the list with an almost complete default ratio of 98 per cent.

Depositors' funds are effectively frozen, while the banks rely on massive central bank support to stay afloat.

"The biggest challenges are r...