The merger process of five banks is progressing rapidly, according to the Bangladesh Bank. The central bank hopes that the merger process will complete by mid-November. The Ministry of Finance approved a draft proposal this week to merge EXIM Bank, Social Islami Bank, First Security Islami Bank, Global Islami Bank, and Union Bank into a single state-owned bank.
Arif Hossain Khan, the spokesperson and executive director of Bangladesh Bank told to Bangladesh Pratidin, "All tasks related to the merger are progressing rapidly. The biggest challenge was raising the necessary capital. Since the new bank will be state-owned and has received funding approval, we hope to complete the process by November."
The new institution will operate as a Shariah-based Islamic bank. The government will add Tk 20,000 crore (twenty thousand crores) in new capital from the national budget. This will bring the merged bank's total initial capital to approximately Tk 35,000 crore (thirty-five thousand crores).
To oversee the entire process, Bangladesh Bank has formed a working committee led by Deputy Governor Kabir Ahmed. The central bank stated that protecting depositors' money will be its highest priority.
Arif Hossain Khan said, "Once the merger is complete, small depositors' money will be paid back first. There is no need for large depositors to panic, as the government has taken responsibility for their deposits."
Central bank officials noted that lawsuits from opponents could be a major challenge to the merger. However, Bangladesh Bank is confident it can handle them. An official stated that Bangladesh Bank is prepared to deal with any lawsuits through the Attorney General's Office. Following the merger, the current board of directors of the five banks will be dissolved. Bangladesh Bank will operate the merged entity initially by forming a new board.
However, no final decisions have been made yet regarding the future of employees or the integration of branch networks. According to Bangladesh Bank data, the five banks' combined defaulted loans amount to approximately Tk 1,47,000 crore (one lakh forty-seven thousand crores), which is about 77% of their total loans. Union Bank's defaulted loan rate is 98%, First Security Islami Bank's is 96%, Global Islami Bank's is 95%, Social Islami Bank's is 62%, and EXIM Bank's is 48%.
Bd-pratidin English/ ANI
