Written by The Banking Post
While First Security Islami and Union Bank have agreed to join the central bank’s merger plan, Exim Bank has refused to take part, saying it needs time to recover on its own.
The decision came yesterday during a meeting at Bangladesh Bank’s headquarters. At the meeting, Exim Bank placed a roadmap outlining how it plans to overcome its current crisis. The central bank, however, asked the lender to submit a more detailed and specific plan before the next round of discussions, said Exim Bank Chairman Nazrul Islam Swapan.
“We presented how we intend to move forward. Bangladesh Bank has asked us to be more precise. We will bring that to the next meeting,” he said after the talks.
Bangladesh Bank has been holding back-to-back meetings with five Shariah-based banks that are under pressure due to high levels of default loans. On Tuesday, the regulator sat with First Security Islami Bank, while a meeting with Union Bank was held yesterday morning. Discussions with Global Islami Bank and Social Islami Bank are scheduled for today.
Governor Ahsan H. Mansur joined the Exim Bank meeting virtually, accompanied by four deputy governors and senior officials from the Bank Resolution Department. Exim’s board members and top executives were also present.
According to Bangladesh Bank, the five banks — First Security Islami, Global Islami, Union, Exim, and Social Islami — together account for more than 77 percent of the industry’s defaulted loans. By international standards, a bank with more than 30 percent of its loans in default is considered fit for restructuring or resolution.
