UNB :
Transparency International Bangladesh (TIB) in statement on Tuesday said the arbitrary announcement of certain bank mergers, coupled with concerns among well-performing banks involved in the process and unwillingness of some underperforming banks, has worsened anxiety, unrest, and uncertainty within the banking sector.
The TIB believes that such instances have cast doubts over the entire process even before it started.
“The central bank has initiated steps to merge underperforming banks with stronger counterparts in order to save weak banks in the sector, which is supposed to be considered as being in line with global practices related to tackling crisis in the financial sector,” TIB opined.
However, global standards and policies including the Bangladesh Bank’s own policies have been ignored to complete this sensitive and complex task hastily, said the statement.
The anti-corruption organisation asserts that the lack of transparency in the bank merger process, particularly concerning the management of default loans and issues of accountability within weak banks burdened by default loans, essentially sidesteps the main problem of the crisis and gives impunity to the factions responsible for loan defaults and forgery.
According to the merger policy issued by the Bangladesh Bank, underperforming banks are allowed to express their interest to merge with financially sound banks following the assessment of assets and liabilities by an auditor firm enlisted by the central bank and disclosing the details in the current year.
Considering the evaluation of assets, there are provisions for good banks to voluntarily express interest in initiating mergers with weaker banks.
Highlighting that the central bank can only resort to forceful mergers if the initial steps fail, said the statement.