BDBL to be merged with Sonali Bank, Rakub with Krishi Bank
Bangladesh Development Bank Ltd (BDBL) will be merged with Sonali Bank while Rajshahi Krishi Unnayan Bank (Rakub) will be taken over by Bangladesh Krishi Bank (BKB), according to a central bank official.
The primary decision of the acquisition was taken at a meeting between Bangladesh Bank Governor Abdur Rouf Talukder and the managing directors of the four state-run banks at the central bank headquarters on Wednesday.
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The government took the decision in principle and informed the banks about the move, the central bank official said, asking not to be named.
Md Afzal Karim, managing director of Sonali Bank, told The Daily Star that a formal decision was yet to be taken about the merger.
He said that primarily the boards of the four banks will have to approve of the merger.
"Then they will apply to the BB," Karim said, adding that a formal decision on the merger may come soon.
If the merger involving the four banks goes ahead, it will be third such attempt as the central bank has stepped up efforts to restore discipline in the banking sector and bring down the runaway defaulted loans to a reasonable level.
Last month, shariah-based Exim Bank agreed to take over struggling Padma Bank.
And this will be the second such experience for BDBL. It was formed out of the merger of two state-run lenders -- Bangladesh Shilpa Bank and Bangladesh Shilpa Rin Sangstha -- 14 years ago as the state-run lenders were creaking under huge default loans.
Speaking to The Daily Star yesterday, a senior official of BDBL said the decision was taken by the government.
"Once the board approves the move, we will apply to the central bank for the merger. All decisions will be taken after Eid," he said, on condition of anonymity.
The merger and acquisition decision of the four banks comes as they continue to struggle to curb bad loans.
Sonali Bank had loans of Tk 93,096 crore as of December 2023. Of the sum, Tk 13,150 crore had turned sour, which was 14.1 percent of the total credits disbursed, BB data showed.
BDBL had an NPL of Tk 982 crore out of the outstanding loans of Tk 2,313 crore, representing a bad loan ratio of 42.45 percent.
BKB's NPL stood at Tk 3,980 crore, which was 12.64 percent of the total advances of Tk 31,487 crore.
Rakub had seen its Tk 1,334 crore become bad loan, accounting for 18.58 percent of the Tk 7,178 crore loans given out as of last year, according to the central bank.
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