In order to develop the banking sector in the country the Bangladesh Bank (BB) is planning to merge 10 banks within a year.
The central bank has made the decision after it identified 38 banks, including six state-owned banks, as weak lenders. The list has been prepared by analyzing a total of 54 banks.
While talking at a press briefing in the city, Mezbaul Haque, Executive Director and Spokesperson of the Bangladesh Bank, on Tuesday informed that the regulator is planning to merge 10 banks within a year.
“Following the merger, the weak bank can become the strong bank while strong banks can be stronger banks,” he told reporters in a press briefing at BB headquarters in the city.
Mezbaul Haque said various departments of BB assess different components regularly for financial risk management. But it is not a real health indicator, he added. He said, “We developed a Prompt Corrective Action (PCA) framework to classify banks. As a result, banks will be evaluated in four categories. This will be done based on the balance sheet of 2024. It will be implemented from May 2025.”
He further said the recent list of the central bank identifying the country’s weak and strong banks has been prepared for research purposes and not for
publishing in the media.
“Not all our reports are for the public. We have to keep some undisclosed for the national interest. The CAMELS ratings on our banks are never meant to be public,” Mezbaul said.
Several media outlets on Monday published reports on the latest edition of the “Banks Health Index and HEAT Map”, a biennial report prepared by the Financial Stability Department of the central bank.
Using the international CAMELS rating system, the report rated financial institutions based on six factors: capital adequacy, asset quality, management, earnings, liquidity and sensitivity to market risk.
The list identified 38 banks, including six state-owned banks, as weak lenders out of the 54 analysed.
