BDBL to merge with SB BKB with RAKUB
Staff Reporter :
In a bid to fortify the country’s financial sector, Bangladesh is set to undergo a significant restructuring, with multiple state-owned and private banks slated for mergers.
Following the consolidation of Exim Bank and Padma Bank, the latest developments indicate the merger of Bangladesh Development Bank Ltd.
(BDBL) with Sonali Bank, alongside Bangladesh Krishi Bank (BKB) absorbing Rajshahi Krishi Unnayan Bank (RAKUB).
The decision, brokered in a pivotal meeting between Bangladesh Bank Governor Abdur Rouf Talukder and the managing directors of the concerned banks at the BB headquarters, underscores a proactive stance towards strengthening the banking landscape.
While an official announcement regarding the mergers is anticipated next week, the boards of directors of the involved banks have been tasked with convening to deliberate and finalise the decision.
Furthermore, discussions are underway regarding the merger of state-owned Basic Bank with Agrani Bank, indicating a concerted effort to streamline operations and bolster efficiency across the sector.
Simultaneously, eight private banks are also engaged in merger talks, with
the overarching objective of reducing the total number of banks from 61 to 50 or fewer.
Despite the strategic rationale underpinning these mergers, concerns have been raised among stakeholders, particularly regarding the amalgamation of weaker banks with stronger counterparts.
Echoing these sentiments, the World Bank, during a recent press conference, emphasised the importance of adhering to established rules and regulations, cautioning against forced mergers that could undermine the stability of the banking ecosystem.
Responding to these concerns, Bangladesh Bank (BB) has issued a comprehensive bank merger policy, delineating the parameters and ramifications of such consolidations.
Under the policy framework, the regulatory body pledges to extend support to acquiring banks, mitigating potential risks, and ensuring the seamless integration of operations.
Crucially, the policy outlines measures to safeguard the financial health of acquiring banks, including exemptions to maintain minimum capital conservation, liquidity, and other key metrics.
Additionally, provisions are made for the adjustment of losses incurred by weaker banks and the provision of liquidity facilities to address immediate operational needs.
Moreover, Bangladesh Bank commits to providing financial assistance to bolster capital reserves through various instruments such as shares, perpetual bonds, and subordinated bonds.
This multi-faceted approach underscores the government’s unwavering commitment to fostering a robust and resilient banking sector capable of weathering economic uncertainties and driving sustainable growth.
