Weak banks could be merged in future

The Bangladesh Bank will merge weak banks in the future if these banks fail to improve their financial health. BRAC Bank Managing Director Selim RF Hussain told journalists about this decision after a bankers meeting at the central bank on Wednesday.

He added, “The central bank aims to tame high inflation and reforms in the banking sector. However, the regulator can take remedial action against these banks if their health condition does not improve in the future.

“These banks would also face restrictions in taking new deposits from depositors, providing loans and opening new branches due to their unhealthy financial conditions.”

The central bank is going to introduce the crawling peg from March this year to stabilise the USD market, Hussain told reporters.

Meanwhile, following Wednesday’s meeting, Bangladesh Bank Executive Director and spokesperson Mezbaul Haque said, “The regulator provided a new timeframe for the banks to mitigate their financial conditions.

“Monetary policy will be tightened until the high inflation is reduced as per the central bank's target. So, liquidity management is also related to monetary policy as well. The central bank will decrease the money flow to fulfill the target of inflation as well.”

He added, “The central bank is concerned about decreasing the non-performing loans (NPL) and reforming the banking sector. If necessary, weak banks might be merged in future if they are unable to improve their financial condition.

“The chairman of Padma Bank resigned yesterday due to health complications and the Bangladesh Bank has accepted his resignation. Sonali Bank Managing Director Afzal Karim will play the role of acting chairman until a chairman is assigned at the bank.”