Kazi Zahidul Hasan :
The Ministry of Finance is mulling over mergers among public sector banks amid their mounting losses that put an immense burden to the state coffer over the years.
Finance Division under the ministry has already started an internal exercise to ascertain the mergers among the state-owned banks. Under the exercise the division will identify impediments or legal issues on the way to the merger process and prepare a summary in this regard.
Officials of the Finance Ministry said the ministry has initially moved forward to merger among Bangladesh Krishi Bank (BKB), Rajshahi Krishi Unnayan Bank (RAKUB), Bangladesh Development Bank Limited (BDBL) and BASIC Bank.
Among them, BDBL and BASIC are specialized commercial banks and BKB and RAKUB are specialized banks. They are incurring huge losses every year due to operational inefficacy, loan irregularities and mismanagement.
Confirming the matter, a senior Finance Division official told The New Nation yesterday that they are looking for all options and viability to bring down the number of public banks through merger among them.
“The objective of the merger is to lessen the burden of the government which every year providing funds to tackle capital shortfall of the public sector banks,” he added.
The official further said that the division is preparing a summary in this regard. The summary will suggest for setting up an expert panel to consider and oversee bank mergers among public sector banks.
“The panel will formulate a mechanism for merger of public banks,” he added.
The Finance Division official further said that the summary would first be sent to the Finance Minister for his appraisal. If he clears it, we will later send it to the Prime Minister for her approval.
When asked, he said, “We’re not going to merger
among the public commercial banks (Sonali, Janata, Agrani and Rupali) right now because they have wide lending exposure in the market with huge client base.”
The government had provided Tk 4,500 crore fund to the state-owned banks in the last five years to overcome their capital shortfall caused by soaring defaulted loans, financial irregularities and losses.
Defaulted loans at public banks stood at Tk 38,517 crore as of September this year.
The six public banks have been operating their activities through 3,710 branches across the country. Of them, about 533 branches are now running with losses.
The Ministry of Finance is mulling over mergers among public sector banks amid their mounting losses that put an immense burden to the state coffer over the years.
Finance Division under the ministry has already started an internal exercise to ascertain the mergers among the state-owned banks. Under the exercise the division will identify impediments or legal issues on the way to the merger process and prepare a summary in this regard.
Officials of the Finance Ministry said the ministry has initially moved forward to merger among Bangladesh Krishi Bank (BKB), Rajshahi Krishi Unnayan Bank (RAKUB), Bangladesh Development Bank Limited (BDBL) and BASIC Bank.
Among them, BDBL and BASIC are specialized commercial banks and BKB and RAKUB are specialized banks. They are incurring huge losses every year due to operational inefficacy, loan irregularities and mismanagement.
Confirming the matter, a senior Finance Division official told The New Nation yesterday that they are looking for all options and viability to bring down the number of public banks through merger among them.
“The objective of the merger is to lessen the burden of the government which every year providing funds to tackle capital shortfall of the public sector banks,” he added.
The official further said that the division is preparing a summary in this regard. The summary will suggest for setting up an expert panel to consider and oversee bank mergers among public sector banks.
“The panel will formulate a mechanism for merger of public banks,” he added.
The Finance Division official further said that the summary would first be sent to the Finance Minister for his appraisal. If he clears it, we will later send it to the Prime Minister for her approval.
When asked, he said, “We’re not going to merger
among the public commercial banks (Sonali, Janata, Agrani and Rupali) right now because they have wide lending exposure in the market with huge client base.”
The government had provided Tk 4,500 crore fund to the state-owned banks in the last five years to overcome their capital shortfall caused by soaring defaulted loans, financial irregularities and losses.
Defaulted loans at public banks stood at Tk 38,517 crore as of September this year.
The six public banks have been operating their activities through 3,710 branches across the country. Of them, about 533 branches are now running with losses.
