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BB halts new bank mergers amid pending five-bank consolidation

Published : Tuesday, 16 April, 2024 at 12:00 AM  Count : 249

Bangladesh has decided not to proceed with any new proposals for bank mergers following the merger of the proposed five banks set to be merged soon. However, the possibility of considering merger proposals in the future has not been ruled out.

While speaking to the media on Monday, Md Mezbaul Haque, executive director and spokesperson of the central bank, stated, "New mergers may be considered if needed after the banks involved in these five proposals are merged. The Bangladesh Bank (BB) will not proceed with any new bank mergers for now."

The Bangladesh Bank has announced that it will not approve any additional proposals for bank mergers at this time, except for those already in the pipeline. "We have received five merging proposals so far," Mezbaul Haque disclosed.

Responding to questions about which banks are included in the five proposals, Mezbaul Haque mentioned that Padma and Exim Bank are among them. "The names of the others have already been disclosed in the media," he added.

According to sources in the banking sector, under the five existing proposals, state-run Sonali Bank aims to acquire Bangladesh Development Bank Ltd (BDBL), while Bangladesh Krishi Bank (BKB) plans to take over Rajshahi Krishi Unnayan Bank (Rakub). Additionally, City Bank intends to acquire the state-run BASIC bank, and United Commercial Bank aims to take over National Bank.

"Merging banks involves various procedures, including appointing auditors, determining assets and liabilities, establishing share prices, allocation, and legal processes. By implementing these five proposals, we (Bangladesh Bank) will gain valuable experience," Mezbaul Haque explained.

He further stated, "Preparing and completing all legal processes for merging two banks can take three to four years." Earlier last month, the struggling Padma Bank decided to merge with EXIM Bank.

Subsequently, news emerged about the merger of Rajshahi Krishi Unnayan Bank (RAKUB) with Krishi Bank, Bangladesh Development Bank Limited (BDBL) with Sonali Bank, the struggling government-owned BASIC Bank with the private sector City Bank, and National Bank with United Commercial Bank (UCB).

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