State-owned Sonali Bank and state-owned Bangladesh Development Bank PLC on Sunday signed a memorandum of understanding to initiate a merger process.
The agreement was signed at the Bangladesh Bank head office in the capital Dhaka.
The central bank will appoint an audit firm to evaluate the assets and liabilities of both banks.
BB governor Abdur Rouf Talukder, Sonali Bank chairman Ziaul Hasan Siddiqui, its managing director and CEO Md Afzal Karim and BDBL chairman Shamima Nargis, and its managing director and CEO Md Habibur Rahman Gazi, among others, were present at the event.
Sonali Bank鈥檚 board approved the merger in the past month.
BDBL employees expressed concern, as the acquiring bank, as per BB guidelines, can make decisions regarding their employment after three years based on their performance.
They had previously sent an open letter to BDBL board, opposing the merger with Sonali Bank.
On the issue, Shamima said that the decision to merge was made by the boards of directors of both banks after considering various factors, aiming for the overall improvement of the banks.
Afzal said that Sonali Bank currently held deposits of Tk聽1,50,000 crore, while BDBL had Tk 3,200 crore.
鈥楢 similar proportion applies to loans. Therefore, the merger is not expected to have a significant impact on Sonali Bank,鈥� Afzal said.
He also reassured BDBL employees, saying that there was no reason for concern or fear.
BDBL was formed in 2009 through the merger of Bangladesh Shilpa Bank and Bangladesh Shilpa Rin Sangstha.
As of December 2023, BDBL鈥檚 defaulted loans stood at Tk 982 crore, accounting for 42.46 per cent of its total disbursed loans.
In comparison, Sonali Bank had loans of Tk聽93,096 crore as of December 2023, with Tk 13,150 crore classified as non-performing, accounting for 14.13 per cent of the total loans disbursed.