Bank mergers will happen indeed: Governor

Bangladesh Bank Governor Ahsan H. Mansur has said that bank mergers will indeed take place and there is nothing to panic about. Discussions on bank mergers are an ongoing process.

Deposits will remain safe and secure, and the government will take responsibility for depositors.

The timeline and details of which banks will merge with which will be announced officially. There is no reason for depositors to worry—everyone will get their money back.

He made these remarks yesterday in response to a question at the unveiling of Bangladesh Bank’s Agricultural and Rural Credit Policy.

As part of the ongoing discussions, the Governor met with the chairmen of four of the five banks involved in the merger talks: First Security Islami Bank, Social Islami Bank, Union Bank, and Global Islami Bank. EXIM Bank did not attend the meeting.

It is learned that these meetings are being held in sequence as an initial step in the formal merger process. The discussions are focused on determining how much money may be needed for the merger and what steps will be required.

Bangladesh Bank will soon send a letter to the government outlining the funding needs, for which data is currently being collected.

Bangladesh Bank aims to complete the merger of the five Islamic banks by October. In June, at a meeting with the chairmen and managing directors of these banks, the central bank officially conveyed this plan for the first time.

To this end, Bangladesh Bank has already engaged an international audit firm to assess the banks’ assets.

The assessment revealed that:

Union Bank has Tk 26,491 crore in defaulted loans, representing 97.80% of its total loans.

First Security Islami Bank has Tk 58,182 crore in defaults, or 96.37% of total loans.

Global Islami Bank has Tk 13,569 crore in defaults, or 95% of total loans.

Social Islami Bank has Tk 23,575 crore in defaults, or 62.30% of total loans.

EXIM Bank has Tk 25,101 crore in defaults, or 48.20% of total loans.

However, EXIM Bank does not want to merge and has already expressed its objections.