Bangladesh Bank on Wednesday dissolved the Boards of Directors of five private banks slated for merger and appointed administrators for them.
The banks are First Security Islami Bank, Global Islami Bank, Union Bank, EXIM Bank, and Social Islami Bank.
The administrators will take charge today, Wednesday, according to sources at the Bangladesh Bank.
The Bangladesh Bank informed the banks through a letter this morning that they will now operate under the Bank Resolution Ordinance. The central bank has determined which administrator will be assigned to which bank and what their responsibilities will be. In the first phase, after the administrators take charge, a maximum of Tk 200,000 will be returned to each depositor from the deposit protection fund.
Meanwhile, Bangladesh Bank Governor Ahsan H Mansur called a press conference today to discuss these matters. The current interim government has decided to merge these five troubled banks into a single entity.
According to Bangladesh Bank data, the combined capital of the merged five banks will be Tk 350 billion, of which the government is providing Tk 200 billion. The remaining 150 billion will be given as shares to the depositors.
The five banks slated for merger currently hold Tk 1.42 trillion in deposits belonging to 7.5 million depositors. Against this, the loan amount is T 1.93 trillion. Out of this, Tk 1.47 trillion, or 76 per cent, is currently non-performing (defaulted).
These banks collectively have 760 branches, 698 sub-branches, 511 agent banking outlets, and 975 ATM booths across the country. Union Bank has the highest percentage of defaulted loans at 98 per cent. This is followed by First Security Islami Bank at 97 per cent, Global Islami Bank at 95 per cent, Social Islami Bank at 62.30 per cent, and EXIM Bank at 48.20 per cent.
New administrators
According to Bangladesh Bank sources, the following administrators have been assigned to the five banks: Shaukatul Alam, Executive Director of Bangladesh Bank, is taking charge of EXIM Bank; Executive Director Salah Uddin is assigned to Social Islami Bank; Executive Director Muhommad Badiuzzaman Dider is being appointed to First Security Islami Bank; Director Md Maksuduzzaman will take responsibility for Global Islami Bank; and Director Mohammad Abul Hashem has been appointed to Union Bank.