Dhaka, July 2 -- Bangladesh Bank is set to issue show cause notices to five Shariah-based banks on Wednesday, seeking explanations as to why they should not be merged in light of their deteriorating financial health. The move signals the formal initiation of the central bank's proposed merger process for underperforming institutions.

The five banks in question are First Security Islami Bank, Global Islami Bank, Union Bank, Social Islami Bank, and EXIM Bank.

According to central bank officials, the decision comes amid claims by some of the banks that they remain financially viable and are capable of recovery without undergoing consolidation. Bangladesh Bank will review the responses from the respective institutions before making a final ...