World Bank calls for prudence in merger of banks

World Bank imageFile photo

The authorities in Bangladesh should be more cautious during the merger of banks and comply with the international rules and regulations throughout the process, says the World Bank.

Its country director for Bangladesh, Abdoulaye Seck, came up with the statement at a programme at their Dhaka office on Tuesday. The programme unveiled a latest report on Bangladesh, called Bangladesh Development Update.

The statement came at a time when two private sector banks, EXIM Bank and Padma Bank, have signed a deal for merger. Experts pointed out an unusual pace in the merger process.

In this regard, Abdoulaye Seck said it needs to analyse how a reform will take place in the banking sector. For instance, the authorities should properly determine the quality of resources during the merger of banks. A certain regulation should be formulated regarding the acquisition and merger of banks.

He also expressed the World Bank’s interest in extending assistance to reform the banking sector in Bangladesh.

Addressing the programme, Bernard Haven, senior economist at World Bank, said there should be initiatives centering the troubled bank and a merger process should be preceded by identification of complications associated with the banks.

Besides, the authorities should look into the fair international practices regarding the merger, he said, noting that a good bank does not acquire excessive liabilities.