After First Security Islami Bank, Union Bank has now expressed its consent to join the ongoing bank merger initiative.
However, EXIM Bank has stated that it is not ready to be part of the process just yet. The bank informed that it wants to focus first on implementing its own recovery plan and needs some time to do so.
Two separate meetings were held at the Bangladesh Bank headquarters yesterday (3 September). The first meeting was with Union Bank. Bangladesh Bank Governor Ahsan H Mansur joined the meeting virtually. Also present were four deputy governors, officials from the central bank’s Bank Resolution Department, Union Bank Chairman M Farid Uddin, and Managing Director Humayun Kabir.
After the meeting, Farid Uddin said, “Depositors are coming to withdraw their money, but we are unable to pay them. So, the sooner a decision is made regarding these banks, the better. This could involve a merger, restructuring, or another solution.”
He further revealed that S Alam Group had taken Tk28,000 crore from Union Bank under various names, but those borrowers could no longer be traced—leading to a liquidity crisis and inability to repay depositors.
Later in the day, another meeting was held with EXIM Bank. During the session, EXIM Bank presented a draft of its internal recovery plan. However, the central bank advised them to refine the plan and make it more specific and detailed.
EXIM Bank Chairman Nazrul Islam Swapan stated after the meeting, “We have presented a roadmap. Bangladesh Bank has asked us to make it clearer and more detailed. We will revise it and present it again in the next meeting.”
Earlier on Tuesday, First Security Islami Bank expressed its support for the merger initiative aimed at forming a new ‘bridge bank’ during a meeting with Bangladesh Bank officials. After the meeting, Chairman Mohammad Abdul Mannan said that the bank had no objection to the central bank’s decision and emphasised that the safety of depositors would be ensured by Bangladesh Bank.
He also disclosed that S Alam Group had withdrawn Tk38,000 crore from First Security Islami Bank using anonymous (benami) loans, as direct borrowing under its own name was not permitted. The bank’s current crisis has been largely caused by these untraceable loans.
To finalise the merger and restructuring process, Bangladesh Bank has been holding a series of meetings throughout the week with troubled banks. On Thursday (4 September), meetings are scheduled with Global Islami Bank in the morning and Social Islami Bank in the afternoon.
