Five Islamic banks to merge into one soon

The Bangladesh Bank (BB) will soon start the process to merge five Islamic banks into a single large bank, said Bangladesh Bank Governor Ahsan H Mansur yesterday.

"We are planning to merge some banks, and it will begin with Islamic banks in the first phase," he said in a media briefing at the central bank headquarters.

The briefing was on his visit to London from June 10 to June 13 as part of the chief adviser's delegation.

Mansur said the employees of these banks will not lose their jobs due to the merger.

The five banks are First Security Islami Bank, Social Islami Bank, Global Islami Bank, Union Bank and Export Import (EXIM) Bank of Bangladesh, as per the BB officials.

While replying to a question, the BB governor said the merger would not be the last of such reforms.

"We will have a dedicated department, a bank resolution department, whose job will be to intervene and take control through nationalisation, merger, liquidation, or whatever necessary action, if banks start heading toward self-destruction," he added.

"Other countries in the world also have such mechanisms," he added.

The central bank governor said a new government would come and hopefully would become involved in this process and keep it running.

"This is a normal process. In the first phase, what we are expecting is to merge a few banks, and that will likely take place within the next few months," he said.

"This has no relation to the change in government; it's a continuous process," he added.

When discussing developments about the recovery of laundered assets, Mansur said the government was in intensive discussions with the UK to recover money laundered by people tied to the regime of ousted prime minister Sheikh Hasina.

"Our communication with the UK is deep at the technical level. They are also supporting us in the preparation of documents," he said.

Bangladesh had requested legal assistance from several countries, including the UK. As a part of the process, it handed over information about the properties of launderers and the laundered money, he said.

Based on the information, the foreign authorities will take action, assured the BB governor.

"It [sending requests] is a continuous process. New requests are being sent to them," he said, responding to a question about whether the UK would freeze more properties of tycoons connected with the former regime.

Recently, the UK's National Crime Agency (NCA) ordered the freezing of £170 million worth of properties belonging to former land minister Saifuzzaman Chowdhury Javed in the UK.

This followed a £90 million asset freeze last month targeting Shayan Rahman and Shariar Rahman of Beximco Group.

"We are also in discussion with other countries," said Mansur, expressing hope over the recovery of a good amount of the money.

International litigation firms are also eager to invest between $50 million and $100 million to finance asset recovery, he said.

A litigation funder is a third party that provides financial support to a litigant to cover legal costs associated with a lawsuit, in exchange for a share of the potential financial recovery from the case.

Mansur said Bangladesh would consider forming a fund as a part of the initiative, alongside raising money from global litigation firms.

"They [litigation firms] will get 15 percent to 20 percent of the recovered money. But the final amount will be decided based on the amount recovered," he said.

Mansur, in an earlier interview with the Financial Times, said banks had lost $17 billion to businesspeople close to the regime of Hasina.

He said they would proceed step by step to furnish appropriate information to the courts.

The settlement of cases out of court is another process. The government has to make the decision on a case-by-case basis, he added.