BASIC Bank officials ‘terrified’ by impending merger

Officials and employees of state-run BASIC Bank are concerned about their future in the face of an impending merger, they said in a memorandum sent to the Bangladesh Bank governor yesterday.

The employees of the bank submitted the memorandum to the governor's office on Tuesday.

However, Bangladesh Bank governor Abdur Rouf Talukder is now in the US to attend the spring meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG).

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City Bank likely to take over BASIC Bank

About a week earlier, they submitted a separate memorandum in this regard to the finance minister as the scam-hit lender is likely to merge with City Bank, a private commercial bank.

In the memorandum, the officials and employees of BASIC Bank said they are 'terrified' over the merger news and, to avoid uncertainty, urged for a merger with a government bank instead.

As a state-run bank, BASIC Bank's officers and employees enjoy and job security alongside various employee benefits -- including salaries, provident fund facilities, gratuity, retirement allowance -- which may differ from those offered at City Bank.

Once a well-run state bank, BASIC descended into a hotbed of irregularities after Sheikh Abdul Hye Bacchu was made its chairman in 2009 on political considerations.

On April 8, City Bank agreed to take over BASIC Bank following a meeting between the Bangladesh Bank governor and the managing director and chairman of City Bank.

Bangladesh Bank executive director and spokesperson Md Mezbaul Haque yesterday told journalists that the merger of weak banks with strong ones is a long process requiring several steps before finalisation.

He also informed that the merger process can be cancelled at any stage, in which case both banks will continue operations as usual.

Responding to a query, Haque said although BASIC is government-owned, it is unlike any other state-run bank.

Other state-run banks were formed through the Banks' Nationalization Order but BASIC Bank was not formed the same way, which is why there will be no difficulties in merging it with a private commercial bank, he added.

BB APPOINTS AUDITOR FOR PADMA BANK, EXIM BANK

As part of their merger, Bangladesh Bank has appointed an audit firm to examine Padma Bank and EXIM Bank and find out the actual financial health of these banks.

The audit firm, Rahman-Rahman Huq, was appointed by the central bank recently as a part of the merger plan, Haque said.

He also said the audit firm was instructed to submit its report to the central bank within a fixed period.

EXIM Bank and Padma Bank signed a memorandum of understanding on March 18 to initiate the merger process in the presence of the central bank governor.

Till now, the central bank has received five merger proposals.

These include state-run Sonali Bank's acquisition of Bangladesh Development Bank Ltd and Bangladesh Krishi Bank's takeover of Rajshahi Krishi Unnayan Bank.

Additionally, City Bank, a private commercial lender, wants to acquire state-run BASIC Bank, while another private lender, United Commercial Bank Limited, plans to buy National Bank.

"We will work on the five proposals at this moment. We will receive more proposals after completing the five proposed mergers," Haque said recently.