The other letter said, panic has broken out among the depositors at the news of the merger with the private sector City Bank. The bank has sought the government’s assistance in this regard.
Copies of the letters have been sent to the governor of Bangladesh Bank as well. An official of the bank, on condition of anonymity, told Prothom Alo, government institutions are withdrawing their deposits. That is why this letter had been issued asking for the decision to be changed.
Bangladesh Bank has basically spoken about the merging of five banks with another five banks. According to the decision, the state-owned BDBL will be merged with Sonali Bank, and Rajshahi Krishi Unnayan Bank with Krishi Bank. The process is underway to merge BASIC Bank with City Bank, Padma Bank with EXIM Bank and National Bank with United Commercial Bank (UCB). Among these, EXIM Bank selected Padma Bank from beforehand in order to avoid a merger with other banks.
Bangladesh Bank on 8 April summoned the City Bank chairman Aziz Al Kaiser and managing director (MD) Masrur Arefin and informed that the crisis-ridden BASIC Bank would have to be merged with City Bank. Bangladesh Bank governor Abdur Rauf Talukdar and advisor Abu Farah Md Naser were present at the time. Neither side has officially admitted to the matter being forcefully imposed.
BASIC had been a good bank
The state-owned BASIC Bank had once been a well-reputed bank. This bank was launched in 1989. The industries secretary would be the chairman of the bank. This practice was broken in 2009 and the chairman was appointed from the private sector. The Awami League government appointed regional level Jatiya Party leader Sheikh Abdul Hye alias Bachchu as the chairman of the bank. This appointment came into effect on 4 October 2009. He was appointed for five years in two terms. In these five years be brought the bank down to its worst condition and then on 5 July 2014 he resigned.
The bank’s loans began to pile up from after Abdul Hye was made chairman. Sidestepping banking rules and regulations, he began sanctioning large loans on his own accord. The default loans of this bank had always been kept under 5 per cent. In five years the default loans shot up to 68 per cent.
