Union Bank agrees to merger initiative, EXIM Bank seeks more time

Highlights
·
Union Bank agreed to
Bangladesh Bank's merger plan
·
EXIM Bank asked for
more time, citing its recovery roadmap
·
Separate meetings were
held with both banks on 3 September
·
Union Bank admitted
Tk28,000cr in loans tied to S Alam Group went untraceable
·
Bangladesh Bank
demands a more detailed recovery plan from EXIM
·
BB meeting troubled
banks to chart their individual paths forward
After First Security
Islami Bank, Union Bank has now expressed its consent to join the ongoing bank
merger initiative.
However,
EXIM Bank has stated that it is not ready to be part of the process just yet.
The bank informed that it wants to focus first on implementing its own recovery
plan and needs some time to do so.
We have presented a roadmap. Bangladesh Bank has asked us to make it clearer
and more detailed. We will revise it and present it again in the next meeting.
Nazrul Islam Swapan, chairman of Exim Bank
Two
separate meetings were held at the Bangladesh Bank headquarters yesterday (3
September). The first meeting was with Union Bank. Bangladesh Bank Governor
Ahsan H Mansur joined the meeting virtually. Also present were four deputy
governors, officials from the central bank's Bank Resolution Department, Union
Bank Chairman M Farid Uddin, and Managing Director Humayun Kabir.
After
the meeting, Union Bank Chairman Farid Uddin said, "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 further revealed
that S Alam Group had taken Tk28,000 crore from Union Bank under various names,
but those borrowers could no longer be traced—leading to a liquidity crisis and
inability to repay depositors.
Later
in the day, another meeting was held with EXIM Bank. During the session, EXIM
Bank presented a draft of its internal recovery plan. However, the central bank
advised them to refine the plan and make it more specific and detailed.
EXIM
Bank Chairman Nazrul Islam Swapan stated after the meeting, "We have
presented a roadmap. Bangladesh Bank has asked us to make it clearer and more
detailed. We will revise it and present it again in the next meeting."
Earlier
on Tuesday, First Security Islami Bank expressed its support for the merger
initiative aimed at forming a new 'bridge bank' during a meeting with
Bangladesh Bank officials. After the meeting, Chairman Mohammad Abdul Mannan
said that the bank had no objection to the central bank's decision and
emphasised that the safety of depositors would be ensured by Bangladesh Bank.
He also disclosed that
S Alam Group had withdrawn Tk38,000 crore from First Security Islami Bank using
anonymous (benami) loans, as direct borrowing under its own name was not
permitted. The bank's current crisis has been largely caused by these untraceable
loans.
To
finalise the merger and restructuring process, Bangladesh Bank has been holding
a series of meetings throughout the week with troubled banks. On Thursday (4
September), meetings are scheduled with Global Islami Bank in the morning and
Social Islami Bank in the afternoon.
















