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Bank mergers possible after passage of law: Kamal

  • Staff Correspondent
  • 30 September, 2021 12:00 AM
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Bank mergers possible after passage of law: Kamal

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Commercial banks are likely to get permission for merger once the related law is passed in Parliament, said Finance Minister AHM Mustafa Kamal.

“The law (merger and acquisition) is at its draft stage. We will take it to the parliament. The merger will be possible only after the law is passed,” he said.

The minister was speaking at a virtual press briefing after he emerged from the meeting of the cabinet committee on government purchase on Wednesday.

The newsmen asked him about the government’s stance over the merger interest shown by state-owned BASIC Bank and private Padma Bank Ltd.

In July, Padma Bank applied to the finance minister for merger with any of the financially strong state-owned banks.

Later, the Financial Institutions Division of the ministry of commerce sent the application to Bangladesh Bank for its opinion.

Kamal, however, denied that he had received any such application from the Padma Bank Ltd.

On the other hand, the government itself wants to merge the problem-ridden BASIC Bank with any of the state-owned banks to keep it salvaged.

The central bank estimated that a vested quarter with the help of the board of directors has looted around Tk 45 billion from the bank in a span of six years period.

Kamal said all the state-owned commercial banks like Sonali Bank Ltd, Janata Bank Ltd, Agrani Bank Ltd and Rupali Bank Ltd have shares in the  Padma Bank.

Apart from this, he said representatives of the state-owned commercial banks are also at the Board of Padma Bank.

He said initially those who were associated with this bank could not run it properly, rather they were allegedly involved in corruption.

"Following filing of the cases, legal procedures are going on while the culprits are now in jail."

He said the government would have to look after the interest of the shareholders of the bank so that the bank is not shut down and can continue its operation. "For this the state-owned banks earlier came up for its rescue."

Over Padma Bank's bid to raise foreign funding, Kamal said anyone abiding by the law can try to raise foreign fund.

"If the foreign investors think it is viable to invest in the bank seeing its balance sheet, then they can invest," finance minister said.

He, however, said that the Padma Bank needs to be compliant and it would have to follow the existing rules and regulations.

He also spoke of awarding the project of setting up a 50MW solar plant in Khulna to a Panama-based company.

He claimed that no anomaly was found regarding the company. 

The Cabinet Committee on Government Purchase last week awarded the project to a Panama-based company named Business Research International Corporation, Inc (BRIC). 

Finance Minister said the government would not make any investment at the solar power plant.

He said the joint venture investors would invest in the plant and produce power.

 "The government will buy electricity from them while the total investment will be made by the joint venture," Kamal added.