World Bank suggests merger of commercial banks

The World Bank (WB) has suggested that Bangladesh should merge the problematic commercial banks with the better performing ones.

Besides, it recommended making the country's capital market vibrant, said Finance Minister AHM Mustafa Kamal after a meeting with the global lender at its headquarters in USA on Friday (USA local time).

Welcoming the proposals, Mr Kamal informed the WB that the government will carry out necessary reforms in the banking sector.

The finance minister took part in the discussion on “Bangladesh’s Financial Sector Assessment”, jointly organised by the WB and the International Monetary Fund (IMF) at the WB headquarters.

“They (WB) told us that the number of private sector banks in Bangladesh is too high and the non-performing loans (NPL) in the public sector are higher,” Mr Kamal told some Bangladeshi journalists in Washington.

However, the WB has acknowledged that since the public sector commercial banks have many branches to serve the general people, its NPLs could be a little bit higher, he added.

The government also needs to operate the public sector banks even through recapitalisation, the minister said.

“They (WB) have told us to merge the private sector banks which are not doing well. We are also discussing this matter,” he said.

Mr Kamal is now in Washington leading a delegation at the WB-IMF Spring Meeting 2019.