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Bank & Finance - March 12, 2024

Banks can merge voluntarily till Dec

Depositors won’t suffer: BB

Staff Correspondent : Bangladesh Bank said that even if a bank is merged, there will be no loss to the interest of its depositors. The regulatory body said that banks can voluntarily merge until December this year. Then in March next year, a decision will be taken on those who will fall in the vulnerable list as per the policy. Following the international practice, the policy will be formulated regarding the method and process of bank merger.
Bangladesh Bank’s Executive Director and Spokesperson Majbaul Haque gave this information in a press conference on Tuesday due to various discussions about bank mergers and weak banks.
Majbaul Haque said that there are various speculations about bank merger. No matter the process by which banks are merged, there will be no loss of interest to the depositors. At the same time, the interests of the investors will also be looked after.

The spokesperson of the central bank said that the banks which will be merged, the health of those banks will be checked by good audit institutions. Only then will the integration process begin. If the banks are merged, it will be done in a proper and transparent process. A merger will ensure that good banks are not weakened and weak banks become better.
Referring to the red, yellow and green listing of banks published in the media recently, Majbaul Haque said that this is not a correct method of looking at the health of banks. Different departments of Bangladesh Bank list banks at different times. This list is conceptual. Where a what if scenario is taken into consideration. The only component of looking at the health of a bank is the audited financial report, which is viewed through the Camels method. Ads by
A delegation of Bangladesh Association of Banks (BAB), a bank entrepreneurs’ organization, met the central bank governor on March 4 amid discussions on bank consolidation. At this time, the central bank informed that 7 to 10 weak banks may be merged with strong or good banks within this year. If the weak banks do not merge voluntarily during this period, they will be forced to merge from next year.
It was also informed in that meeting that Asset Management Company (AMC) will buy bad assets (loans) of weak banks. As a result, there is no danger of good banks going bad due to mergers. But the directors of weak banks will lose their ability to be directors of good banks.

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