Bangladesh Bank Governor Assures No Need to Worry Over Bank Mergers; Deposit Safety Guaranteed
Bangladesh Bank Governor Ahsan H. Mansur has reassured the public that there is no need to panic regarding the ongoing bank merger discussions in the country. Speaking at the announcement event of Bangladesh Bank’s Agricultural and Rural Loan Policy, he emphasized that the bank consolidation process is a continuous exercise aimed at ensuring the safety and security of depositors’ funds
Governor Mansur explained that the government will take full responsibility for depositors’ money during the merger process. The timeline and details of which banks will merge and when will be formally announced in due course. He urged depositors to remain calm, assuring that everyone will get their money back without any loss.
The Governor recently held a meeting with chairpersons of four out of the five banks under merger consideration: First Security Islami Bank, Social Islami Bank, Union Bank, and Global Islami Bank. Exim Bank, the fifth bank, was not present at the meeting and has expressed reluctance to participate in the merger.
These discussions form part of the formal procedural steps toward the consolidation of these banks. The primary focus of these talks is to finalize how much funding will be required to facilitate the mergers and to plan the necessary actions. Bangladesh Bank will soon submit a letter to the government outlining the funding needs, based on the data collected so far.
The central bank aims to complete the merger of these five Islamic banks by October. Earlier in June, a similar meeting was held with the banks’ chairpersons and managing directors to convey this intention officially.
An independent audit firm has already conducted valuation assessments of the banks involved. The findings revealed high levels of non-performing loans (NPLs) in these banks: Union Bank with 26,491 crore BDT (97.80% of total loans) classified as defaulted; First Security Islami Bank with 58,182 crore BDT (96.37%); Global Islami Bank with 13,569 crore BDT (95%); Social Islami Bank with 23,575 crore BDT (62.30%); and Exim Bank with 25,101 crore BDT (48.20%). Despite the high NPLs, Exim Bank has expressed opposition to the merger, a stance communicated to Bangladesh Bank by bankers.
Governor Mansur’s statements aim to calm depositors’ fears while Bangladesh Bank proceeds with the careful and structured process of banking sector consolidation.
