Dhaka, Bangladesh (BBN)– The central bank of Bangladesh is always careful and alert regarding merger and acquisition (M&A), a deputy governor of the apex bank said.
“We’re always careful and alert regarding the issues and always trying to maintain the balance in the banking industry,” SK Sur Chwdhury, deputy governor of the Bangladesh Bank (BB) said while addressing at a workshop as chief guest.
The research workshop, organized by Bangladesh Institute of Bank Management (BIBM) held at its office in the capital on Thursday with its Director General Dr. Toufic Ahmed Chowdhury in the chair.
He also said the central bank has already prepared three policy documents –directed merger, purchase and assumption and bridge bank – as contingency planning for bank intervention and resolution framework.
“The policy documents have been prepared under contingency planning and bank intervention/resolution framework of the central bank approved by its board of directors,” the deputy governor explained.
Regarding the performance of state owned commercial banks, in many cases this is not satisfactory, he said, adding that even some private commercial banks are very weak in the industry at present.
“Considering other side of the banking industry we find different problems faced by the banks including the problems of NPL, lack of good governance etc,” he explained.
He also said business restructuring like mergers and acquisitions is one way to get a solution for the weak banks in the industry.
“It is matter to consider with critical analysis and farsightedness whether we should go for arrangements like merger and acquisition in our banking sector or not,” he noted.
“Shall we use it as a problem solving tool only?” Earlier in 2007, the central bank of Bangladesh issued guidelines for banks/financial institutions in 2007 covering matters like legal issues, proposal of merger/amalgamation, commencement of the due-diligence, submission of due-diligence report, consent of the shareholders, examination of draft scheme, valuation of assets and liabilities to meet the demand for corporate restructuring.
Among others, the BIBM’s Professors Khondkar Ibrahim Khaled, Md. Yasin Ali, Helal Ahmed Chowdhury and Mohiuddin Siddique also spoke on the workshop.