1. “Effects & Policies Of Bank Consolidation”
~Md.Mizanur Rahman~
Research Scholar
(Geopolitics & Geo-economics)
The process of bank consolidation began at a time when Bangladesh's economy was in a
precarious situation, where banking irregularities and loan defaults were at their peak.
It was necessary for Bangladesh Bank to take strict initiatives, but the related circular
seemed very weak. Their merger policy may be questioned in terms of its effectiveness,
suitability, and the timeframe it requires. Doubts arise regarding how much work will
actually be accomplished. The failure to fully meet the conditions of the $4.5 billion loan
from the IMF also indicates weakness in this regard. Money laundering is an
international crime. It has been reported in the media that smuggling has occurred
through banking channels from Bangladesh. Alongside implementing stringent policies
to prevent this crime, I believe it is also essential to adopt international mechanisms.
Weak banks in Bangladesh have already begun the process of consolidation, such as the
merger between Exim Bank and Padma Bank. The merger of Padma Bank will not
directly cause significant harm to the general public because they do not have much
savings here. However, if Islamic banks are merged, ordinary people and countless small
and medium entrepreneurs will be destroyed. They may never be able to file cases. The
reason is that Islamic banks operate on the basis of profit-sharing rather than interest.
Overall, it remains to be seen whether Bangladesh Bank will bring changes in their
management policies. Also, whether strengthening the banking independent commission
will be effective or not is yet to be determined.
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