Government Will Take Temporary Ownership and Provide Capital Support
Bangladesh Bank Governor Dr. Ahsan H. Mansur has said that the central bank is planning to merge six weak banks by July 2025. These banks have become financially weak due to irregularities and loan fraud.
To help them recover, the government will take temporary ownership of these banks and will provide them with necessary capital support.
Governor’s Statement on TV Interview
Dr. Ahsan H. Mansur gave this information in a recent interview with private television channel Channel 24.
He said,
“We hope to bring these six banks under government ownership by July and provide them with required capital. The central bank has already given them liquidity support.”
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Which Banks Will Be Merged?
The six banks that will be merged are:
- First Security Islami Bank
- Social Islami Bank
- Union Bank
- Global Islami Bank
- EXIM Bank
- National Bank
Among these, five banks were under the control of the controversial business group S. Alam until August 5, 2023. The remaining one bank was controlled by Nazrul Islam Mazumder.
Temporary Government Control
The governor explained that the banks will be under government control only for a short period. After the banks are reorganized and made stable, their ownership will be transferred to:
- The general public, and
- International strategic investors
He said,
“These banks will be temporarily held by the government. Later, we will transfer their shares to the public and international investors. But this will happen only after proper reorganization of the banks.”
Improving Capital Ratios
The governor also mentioned the central bank’s plan to improve the capital adequacy ratio (CAR) of the weak banks.
He said,
“Some banks have a capital shortfall. Our goal is to improve their capital adequacy ratio to between 12.5% and 15% within four years.”
What Is Capital Adequacy Ratio (CAR)?
According to the current rules of Bangladesh Bank, each bank must keep a minimum 10% capital against their risk-weighted assets.
In addition, banks must keep another 2.5% as a Capital Conservation Buffer (CCB).
So, the total capital requirement stands at 12.5%.
No Official Confirmation Yet
Although several attempts were made, Governor Dr. Ahsan H. Mansur could not be reached for further comments.
However, Arif Hossain Khan, the spokesperson of Bangladesh Bank, said:
“A television channel has reported that six banks are being merged. Since Bangladesh Bank has not denied this, I believe the governor has indeed provided this information.”
“However, we have not received any official notice yet,” he added.
Source: TBS
