Global Islami Bank on Thursday agreed to join Bangladesh Bank鈥檚 ongoing merger initiative, becoming the third private lender to consent after First Security Islami Bank and Union Bank.
The move came amid mounting pressure on troubled banks linked to the S Alam Group.
The decision was announced by Global Islami Bank chairman Mohammad Nurul Amin following a central bank hearing in Dhaka.
He disclosed that the bank鈥檚 loan portfolio stands at Tk 14,000 crore, of which Tk 12,000 crore had been disbursed to S Alam Group through multiple entities.
Most of those loans are now in default, with collateral covering less than 25 per cent of the exposure.
Earlier this week, Union Bank and First Security Islami Bank also confirmed their willingness to merge.
Together, the two banks reportedly lent nearly Tk聽66,000 crore to the S Alam Group, much of which remains unpaid.
Social Islami Bank, however, was taking more time, saying it wants to stabilise its financial health before entering any merger process. Its officials indicated that they would leave the final decision to the central bank.
Meanwhile, EXIM Bank has opted out for now with its board stating that the bank requires at least two more years before considering a merger. The bank was previously chaired by Nazrul Islam Majumdar.
Bangladesh Bank has been holding a series of hearings with five financially weak banks this week as part of its merger plan.