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BASIC Bank to merge with City Bank

Staff Correspondent
08 Apr 2024 21:13:38 | Update: 08 Apr 2024 21:13:38
BASIC Bank to merge with City Bank

BASIC Bank is now set to merge with City Bank in a significant development within Bangladesh's banking sector as part of the government’s move to discipline the sector.

The move was decided during a meeting between Bangladesh Bank (BB) Governor Abdur Rouf Talukder and top officials from City Bank on Monday, sources confirmed.

The meeting was also attended by City Bank Chairman Aziz Al Kaiser and Managing Director and CEO Mashrur Arefin, who discussed the future of this strategic consolidation with the BB governor.

Central bank sources said that the merger between BASIC Bank and City Bank will be carried out on a voluntary basis.

This decision comes after City Bank's board recommended the merger on March 19, which was subsequently discussed with BASIC Bank's board and officials from both banking institutions.

Despite the merger, it has been decided that for the next three years, the two banks will continue to report their financials separately, according to sources close to the matter.

A central bank official, requesting anonymity, told The Business Post that BASIC Bank is a very weak bank. This trouble-ridden lender is now expected to merge with City Bank — a development that comes less than a week after the government decided in principle to merge four state banks.

The correspondent tried several times to reach Mashrur Arefin on mobile phones, but he did not receive. But he commented in another media that he discussed a merger with the governor of the Bangladesh Bank, but he did not mention the name of the bank.

Commenting on the broader context of bank mergers in the country, BB Executive Director and Spokesperson Mezbaul Haque noted that several banks are currently engaging in discussions with the central bank on various issues, including potential mergers.

He assured that the public would be informed once a final decision is reached on these matters.

This move comes amidst a trend of bank consolidations within Bangladesh, highlighted by the recent agreement for Padma Bank to merge with EXIM Bank in March, signalling a wave of strategic mergers aimed at strengthening the country's banking sector.

Following suit, two more banks — Bangladesh Development Bank Limited (BDBL) and Rajshahi Krishi Unnayan Bank (RAKUB) — are also set to merge with two other banks.

BDBL will merge with Sonali Bank and RAKUB with Bangladesh Krishi Bank. On Sunday, different sources and officials had said that separate memorandums of understanding (MoUs) would be signed at BB on Monday. But no such event took place on Monday and no official could say when the MoUs would be signed.