Union Bank agrees to merger

The scam-hit Union Bank has agreed to the central bank's plan to merge it with other lenders, while EXIM Bank has asked for more time to revive itself.

Under the Bank Resolution Ordinance 2025, the central bank must consult the five Shariah-based banks slated for consolidation before commencing formal merger procedures.

Yesterday, the Bangladesh Bank (BB) held separate meetings with Union Bank and EXIM Bank regarding the mergers. Governor Ahsan H Mansur joined virtually, citing illness.

The boards of directors and management teams of the two banks, along with the four deputy governors and officials from the Bank Resolution Department of the BB, were present at the meeting.

A day earlier, the BB met with the board of directors and management team of First Security Islami Bank.

The central bank is set to meet with the boards of directors and management teams of Global Islami Bank and Social Islami Bank today.

"Depositors are coming to withdraw their money, but we are unable to pay. The sooner a decision is made regarding these banks, the better. In this case, the banks may undergo merger, restructuring, or some other measure," Fariduddin Ahmed, independent director and chairman of Union Bank, told journalists after yesterday's meeting with the BB.

He mentioned that S Alam took Tk 28,000 crore from Union Bank. The borrowers in whose names the loans were taken cannot be traced. As a result, it has become difficult to return depositors' money.

Officials of the central bank said that in the BB-EXIM Bank meeting, EXIM Bank presented its turnaround plan. However, they were asked to revise and resubmit it with more specifics.

The central bank asked EXIM Bank officials to clearly outline how the bank will return depositors' money, present a concrete plan for recovering defaulted loans, explain how they will repay the Tk 8,500 crore borrowed from the central bank, and address the large capital shortfall, according to meeting sources.

The bank will be considered further only if its revised plan appears realistic, BB officials said.

Officials of EXIM Bank said it would take at least two years to bring the bank back into good shape.

"The question is whether the central bank will give us that time. But this bank did not suddenly fall into trouble," one EXIM Bank official said on condition of anonymity.