Bangladesh Bank governor Ahsan H Mansur said that they had recommended the merger of state-owned banks to accelerate the reform in the banking sector hamstrung during the Awami League regime before being ousted on August 5 in the wake of a mass uprising.
鈥楾he financial health of some of the banks is not in a good condition,鈥� said the governor during an interview at his office on Thursday.
Without naming the weak banks, he said that the merger between a weak public bank with Sonali Bank could be made, said the BB governor who was appointed as the central bank chief on August 14, 2024, a week after the interim government assumed power on Auugut 8, 2024.
The BB governor revealed the plan when the central bank has already taken a step to merge First Security Islami Bank, Global Islami Bank, Union Bank, Social Islami Bank, and EXIM Bank with the average non-performing loans of these sharia-based private banks reaching over 72 per cent.
鈥楾heir bad loans are beyond recovery,鈥� said the BB governor, adding that the merger of the banks was at an advanced stage.
Under the new leadership of Ahsan H Mansur, the BB has initiated several measures to streamline the banking sector facing multiple problems like mismanagement and growing bad loans and distressed assets because of loan scams, plundering, malpractices and indiscipline amid political interferences during the AL regime.
Non-performing loans jumped sharply to around Tk 4.0 lakh crore by the end of March 2025 from Tk 3.45 lakh crore in December 2024 in the sector that grew considerably to 62 scheduled banks in 2025 from 18 banks after the country鈥檚 Independence in 1972.
Non-performing loans in the six state-owned commercial banks -- Agrani Bank, Bangladesh Development Bank, BASIC Bank, Janata Bank, Rupali Bank, and Sonali Bank-- surged to Tk1.46 lakh crore, accounting for 36.5 per cent of the overall bad loans.
鈥楽ome of the public banks have more than 70 per cent of NPLs of its outstanding credit,鈥� said the BB governor.聽聽聽聽聽
The BB reported that Janata Bank possessed the highest volume of defaulted loans 鈥� Tk 70,846 crore 鈥� amounting to nearly 75 per cent of its total outstanding credit.
Agrani Bank has Tk 29,721 crore in defaulted loans, Sonali Bank Tk 19,091 crore, and Rupali Bank reported Tk 17,122 crore.
Answering what measures have taken to carry out the reform of the scam-hit state-owned public commercial banks, the governor聽 said that the central bank had already performed its responsibility by submitting reports on them to the government.
As the ultimate responsibility the banks lies with the government is the sole decision maker, he said, adding that it should select one among the possible options.
Highlighting the suggestion of merger made by the Bangladesh Bank, Ashan H Mansur said that the merger between a weak bank and Sonali Bankwould not cause any liability of injecting any fund to complete the amalgamation.
鈥楽onali has a lot of liquidity,鈥� added the BB governor.
He said that the new entry after the amalgamation should be run commercially, free of political interference, to ensure qualitative changes.
Hiring and firing in the merged entity will be made by the bank management although the government will be the majority shareholder, he said.
NPLs at private banks reached Tk2.64 crore, representing around 66 percent of the overall bad loans that pose a significant threat to a country鈥檚 financial stability and economic development.
The BB governor said that they had already decided to merge five sharia-based banks, affected badly in the past one decade,
The five banks involved are First Security Islami Bank, Global Islami Bank, Union Bank, Social Islami Bank, and EXIM Bank with their overall bad loans standing at around 72 per cent of their outstanding loans.
The BB governor said that the government was likely to inject around Tk 20,000 crore for the merger of these five banks and around Tk 12,000 crore will be given from the BB鈥檚 depository insurance fund for the same purpose.
He said that the new unit would be run like a private entity with the target to sell it to foreign buyers in the next three years.聽
