Hasty and forced mergers new face of continued impunity in banking sector: TIB | The Business Standard
Skip to main content
  • Latest
  • Economy
    • Banking
    • Stocks
    • Industry
    • Analysis
    • Bazaar
    • RMG
    • Corporates
    • Aviation
  • Videos
    • TBS Today
    • TBS Stories
    • TBS World
    • News of the day
    • TBS Programs
    • Podcast
    • Editor's Pick
  • World+Biz
  • Features
    • Panorama
    • The Big Picture
    • Pursuit
    • Habitat
    • Thoughts
    • Splash
    • Mode
    • Tech
    • Explorer
    • Brands
    • In Focus
    • Book Review
    • Earth
    • Food
    • Luxury
    • Wheels
  • More
    • Sports
    • TBS Graduates
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • Gallery
    • Long Read
    • Interviews
    • Offbeat
    • Magazine
    • Climate Change
    • Health
    • Cartoons
  • বাংলা
The Business Standard

Wednesday
June 11, 2025

Sign In
Subscribe
  • Latest
  • Economy
    • Banking
    • Stocks
    • Industry
    • Analysis
    • Bazaar
    • RMG
    • Corporates
    • Aviation
  • Videos
    • TBS Today
    • TBS Stories
    • TBS World
    • News of the day
    • TBS Programs
    • Podcast
    • Editor's Pick
  • World+Biz
  • Features
    • Panorama
    • The Big Picture
    • Pursuit
    • Habitat
    • Thoughts
    • Splash
    • Mode
    • Tech
    • Explorer
    • Brands
    • In Focus
    • Book Review
    • Earth
    • Food
    • Luxury
    • Wheels
  • More
    • Sports
    • TBS Graduates
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • Gallery
    • Long Read
    • Interviews
    • Offbeat
    • Magazine
    • Climate Change
    • Health
    • Cartoons
  • বাংলা
WEDNESDAY, JUNE 11, 2025
Hasty and forced mergers new face of continued impunity in banking sector: TIB

Banking

TBS Report
23 April, 2024, 07:50 pm
Last modified: 24 April, 2024, 02:01 pm

Related News

  • DGHS issues 11-point directive to prevent spread of Covid-19 in Bangladesh
  • Covid-19 testing to resume at hospitals amid rising infections
  • Commonwealth offers support in Bangladesh reform process 
  • Dhaka's Eid waste cleanup mostly satisfactory with some hiccups
  • Bangladesh's growth forecast unchanged: WB report

Hasty and forced mergers new face of continued impunity in banking sector: TIB

“The arbitrary announcement of certain bank mergers, coupled with concerns among well-performing banks involved in the process and unwillingness of some underperforming banks, has worsened anxiety, unrest, and uncertainty within the banking sector,” said TIB.

TBS Report
23 April, 2024, 07:50 pm
Last modified: 24 April, 2024, 02:01 pm
Hasty and forced mergers new face of continued impunity in banking sector: TIB

Hasty and forced mergers of banks will result in further impunity in the banking sector, Transparency International Bangladesh (TIB) said today (23 April), calling for a halt to the merger implementations.

The central bank has initiated steps to merge underperforming banks with stronger counterparts in order to save weak banks in the sector, which is supposed to be considered as being in line with global practices related to tackling the crisis in the financial sector, the TIB said in a statement.

"However, global standards and policies including the Bangladesh Bank's own policies have been ignored to complete this sensitive and complex task hastily.

The Business Standard Google News Keep updated, follow The Business Standard's Google news channel

"The arbitrary announcement of certain bank mergers, coupled with concerns among well-performing banks involved in the process and unwillingness of some underperforming banks, has worsened anxiety, unrest, and uncertainty within the banking sector," said TIB.

The organisation believes that "such instances have cast doubts over the entire process even before it started."

TIB asserted that the lack of transparency in the bank merger process, particularly concerning the management of default loans and issues of accountability within weak banks burdened by default loans, essentially sidesteps the main problem of the crisis and gives impunity to the factions responsible for loan defaults and forgery.

According to the merger policy issued by the Bangladesh Bank, underperforming banks are allowed to express their interest to merge with financially sound banks following the assessment of assets and liabilities by an auditor firm enlisted by the central bank and disclosing the details in the current year.

Considering the evaluation of assets, there are provisions for good banks to voluntarily express interest in initiating mergers with weaker banks.

Highlighting that the central bank can only resort to forceful mergers if the initial steps fail, TIB Executive Director (ED) Dr Iftekharuzzaman stated, "Based on media reports, only one weak bank has shown interest in voluntary merger, and conversely, it's not necessarily the case that the financially sound banks mentioned in the process have willingly and consciously engaged in it.

"This suggests that the entire process has been imposed on them arbitrarily, which is a clear violation of the declared policies."

Moreover, he said, "How fair and reasonable is it to transfer the burdens of default loans and forgeries to good banks without first assessing the assets and liabilities of the weaker ones?

"It appears that the ongoing actions are akin to prescribing paracetamol for cancer treatments. On one hand, the culture of loan defaults is exacerbated by shielding factions responsible for them and forgery under the guise of mergers.

"Contrarily, significant attempts are underway to compel good banks to digest weaker ones as a result of their success. This has fostered an atmosphere of anxiety and restlessness across the entire sector."

Expressing apprehensions that attempts to salvage weak banks might backfire, the TIB ED said all types of mergers are being considered, including among state-run banks, private banks and private and state-run banks.

"However, it remains unclear on what basis these banks have been prioritised, or how the decision was made regarding which financially sound banks would merge with which weak ones," said the TIB chief.

"Additionally, some banks not yet mentioned in the merger process have been kept afloat through liquidity assistance," he added.

However, Iftekharuzzaman said two government-owned banks, known for their strong performance, are slated to absorb two underperforming banks despite having significant amounts of default loans themselves. 

"Given these circumstances, it is unrealistic to believe that simply merging banks, without ensuring effective accountability-based good governance to address the basic challenges in the banking sector, will resolve the problem or safeguard the interests of clients."

Criticising the provisions of the merger policy, which permit directors of underperforming banks to return to the board of the merged bank after a five-year break as well as the provision for the reappointment of top executives implicated in mismanagement, he stated, "This provision rewards the perpetrators behind the banking crisis with impunity rather than holding them accountable.

"Furthermore, the provision to maintain the secrecy of new irregularities or corruption uncovered during audits of underperforming banks will not only hide financial discrepancies but also hinder the process of holding individuals accountable.

"Essentially, it means protection for wrongdoings. It is disheartening to witness what is happening in the name of mergers as it shows how defaulters control banks."

As per the policy, a state-owned asset management company will acquire the non-performing loans of weak banks, indicating that government funds will be utilised to purchase these bad loans.

This essentially means that loan defaulters have once again been exempted by using public funds. Given the precarious state of the banking sector and public concerns, TIB emphasised the need for essential reforms in the bank merger policy. These changes must be in line with global norms and experiences as well as the opinions of unbiased and renowned experts in the field, said the anti-corruption organisation.

Furthermore, until these reforms are implemented, TIB called for halting the implementation of decisions made under the pretence of mergers.

Bangladesh / Top News

TIB / Forced bank mergers / Bangladesh

Comments

While most comments will be posted if they are on-topic and not abusive, moderation decisions are subjective. Published comments are readers’ own views and The Business Standard does not endorse any of the readers’ comments.

Top Stories

  • File Photo: TBS
    DGHS issues 11-point directive to prevent spread of Covid-19 in Bangladesh
  • Rizvi at a briefing at BNP’s Nayapaltan central office on 11 June. Photo: Collected
    Yunus-Tarique meeting to usher in a fresh breeze for democracy: Rizvi
  • Members of law enforcement work to clear the area, as protests against federal immigration sweeps continue, in downtown Los Angeles, California, US June 10, 2025. Photo: REUTERS
    US cities brace for more protests as parts of Los Angeles placed under curfew

MOST VIEWED

  • Illustration: Duniya Jahan/ TBS
    Forget Katy Perry, here’s Bangladesh’s Ruthba Yasmin shooting for the moon
  • A file photo of Bangladesh Bank Governor Dr Ahsan H Mansur. Photo: Collected
    'I have no relation with this': Ahsan Mansur debunks Joy’s allegations over daughter’s Dubai flat
  • Faiz Ahmad Tayeb. Photo: BSS
    Import duty on raw materials for e-bikes, lithium batteries reduced from 80% to 1% in some cases: Faiz Taiyeb
  • Screengrab from video shows a group of local youths forcing tourists to leave a tourist spot in Utmachhra area of Sylhet's Companiganj on Sunday, 8 June 2025, citing allegations of obscene activities and environmental damage
    Locals declare tourist spot in Sylhet 'closed', force visitors to leave
  • Shakil Ahmed. Photo: Collected
    DU student allegedly hangs himself following threats over old derogatory comment about Prophet on Facebook
  • Photo shows the Land Cruiser Prado car belonging to former member of parliament (MP) Anwarul Azim Anar found in Kushtia. Photo: TBS
    Luxury car of ex-AL MP Anar, who was killed in Kolkata, found in Kushtia

Related News

  • DGHS issues 11-point directive to prevent spread of Covid-19 in Bangladesh
  • Covid-19 testing to resume at hospitals amid rising infections
  • Commonwealth offers support in Bangladesh reform process 
  • Dhaka's Eid waste cleanup mostly satisfactory with some hiccups
  • Bangladesh's growth forecast unchanged: WB report

Features

Illustration: Duniya Jahan/ TBS

Forget Katy Perry, here’s Bangladesh’s Ruthba Yasmin shooting for the moon

19h | Features
File photo of Eid holidaymakers returning to the capital from their country homes/Rajib Dhar

Dhaka: The city we never want to return to, but always do

2d | Features
Photo collage shows political posters in Bagerhat. Photos: Jannatul Naym Pieal

From Sheikh Dynasty to sibling rivalry: Bagerhat signals a turning tide in local politics

4d | Bangladesh
Illustration: TBS

Unbearable weight of the white coat: The mental health crisis in our medical colleges

6d | Panorama

More Videos from TBS

Covid-19 testing to resume at hospitals amid rising infections

Covid-19 testing to resume at hospitals amid rising infections

52m | TBS Today
Curfew ordered in downtown Los Angeles after looting and vandalism

Curfew ordered in downtown Los Angeles after looting and vandalism

1h | TBS World
Israel kidnapped me in international waters: Greta Thunberg

Israel kidnapped me in international waters: Greta Thunberg

2h | TBS World
Is the chief adviser's meeting with the British Prime Minister uncertain?

Is the chief adviser's meeting with the British Prime Minister uncertain?

3h | TBS Stories
EMAIL US
contact@tbsnews.net
FOLLOW US
WHATSAPP
+880 1847416158
The Business Standard
  • About Us
  • Contact us
  • Sitemap
  • Advertisement
  • Privacy Policy
  • Comment Policy
Copyright © 2025
The Business Standard All rights reserved
Technical Partner: RSI Lab

Contact Us

The Business Standard

Main Office -4/A, Eskaton Garden, Dhaka- 1000

Phone: +8801847 416158 - 59

Send Opinion articles to - oped.tbs@gmail.com

For advertisement- sales@tbsnews.net