This time, the reputable private sector City Bank and the troubled BASIC Bank are merging. This was decided upon at a meeting that took place in Bangladesh Bank today, Monday.
This information was obtained from central bank sources. The central bank’s representatives declared that the combination of City Bank and BASIC Bank will happen willingly. Now, Basic Bank will become the second private sector bank to merge with another bank.
At a meeting on Monday morning, managing director (MD) Masrur Arefin, chairman of City Bank Aziz Al Kaiser, and governor of Bangladesh Bank Abdur Rauf Talukdar made this decision.
The City Bank board was urged to merge with BASIC Bank earlier on March 19. Following that, the boards of City Bank and BASIC Bank discussed the issue. The issue was discussed amongst the officials of the two institutions. Despite their impending merger, the two banks will continue to provide independent reports for the next three years.
While the City Bank managing director Masrur Arefin did not confirm the merger with BASIC Bank, he told Prothom Alo that they were looking into the matter of a strong bank merging with a weak bank.
He said, “City Bank itself was a weak bank in 2007, and now we are the top local bank in the country. We are experienced at bank restructuring. We will get three years to merge the balance sheets. If these three years go well, we are confident of an extension. We want to grow into a stronger and bigger bank and to stand by the finance sector in times of crisis. That is why, being skilled in bank restructuring, we are analysing the weaker banks. I cannot say more than this.”
This has led to the decision to combine two government banks and two private banks, for a total of four banks. In March, Padma Bank and Exim Bank reached a merger agreement. This led to the string of acquisitions. Additionally, Bangladesh Bank has chosen to combine Bangladesh Development Bank (BDBL) with Sonali Bank and Rajshahi Krishi Unnayan Bank with Krishi Bank.
