Business Desk: In pursuit of amalgamation, Padma Bank has signed a memorandum of understanding (MoU) with EXIM Bank.
The Managing Directors of both banks consented to the merger in the presence of the Governor at the Bangladesh Bank’s conference hall on Monday, with the chairpersons of both institutions also in attendance.
The decision for merger was finalized during a meeting of the management councils of both banks on March 14. Prior to this, both banks had verbally consulted the central bank regarding the amalgamation.
Before the merger can take effect, an evaluation of assets will be conducted through a third-party inspection. Accordingly, the valuation of Padma Bank’s assets will be determined.
During discussions on bank amalgamation, the Chairman of Padma Bank, Mr. Chowdhury Nafiz Sarafat, resigned from his position. Consequently, the responsibility of the bank’s acting chairman has been assumed by Afzal Karim, the management director of Sonali Bank.
Previously, the Bangladesh Bank had expressed dissatisfaction with the lack of progress in the amalgamation of Union Capital with a private prime bank due to various complexities.
In order to strengthen the financial foundation of weak banks through amalgamation, the central bank aims to make the banking sector more robust.
To this end, a PC framework has been provided based on four indicators: non-performing loans, capital shortfall, management, and liquidity.
Accordingly, weak banks have been instructed to merge by December next year voluntarily. If not done voluntarily, the central bank will mandate the merger.