Forceful bank merger not the right step, says former governor Farashuddin

Forceful mergers of banks will not be the right step and banks should agree for the consolidation in the first place, said Mohammed Farashuddin, a former governor of the Bangladesh Bank.

He said merger is an international method of absorption of a weak bank by a good a bank.

"However, both banks must give their consent for the merger as a forced one will be wrong."

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He was speaking at an event titled "Conversation with ERF" organised by the Economic Reporters' Forum at its auditorium in Dhaka today.

He also said that there are other ways than mergers to turn a weak bank into a good one. 

The former governor said the liquidity crisis deepened in the banking sector due to repeated rescheduling of loans. 

"The central bank is printing money to end the liquidity crisis. Therefore, inflation is not declining."