Written by The Banking Post
Union Bank has agreed to participate in Bangladesh Bank’s ongoing bank merger initiative, becoming the second troubled lender after First Security Islami Bank to give its consent.
At a meeting with the central bank on Wednesday, Union Bank Chairman M Farid Uddin admitted the bank was under severe stress. “Depositors are coming to withdraw their money, but we are unable to pay them. So, the sooner a decision is made regarding these banks, the better. This could involve a merger, restructuring, or another solution,” he said.
He also disclosed that S Alam Group had withdrawn Tk28,000 crore from Union Bank under different names, but the borrowers could no longer be traced, creating a severe liquidity crisis.
Later in the day, EXIM Bank met Bangladesh Bank officials but requested more time before joining the process. The bank presented a draft recovery plan, which the central bank asked to refine and make more detailed. “We have presented a roadmap. Bangladesh Bank has asked us to make it clearer. We will revise and present it again,” said EXIM Bank Chairman Nazrul Islam Swapan.
On Tuesday, First Security Islami Bank had already expressed its support for the merger, revealing that S Alam Group had withdrawn Tk38,000 crore in benami loans, leaving the bank crippled.
Bangladesh Bank has scheduled further meetings this week with Global Islami Bank and Social Islami Bank as it accelerates efforts to stabilise the sector through mergers and restructuring.
