Beleaguered Padma Bank set to merge with Exim Bank

A memorandum of understanding will be signed by the two banks on Mar 18

Padma Bank, which has long been struggling with bad loans, is set to merge with the Shariah-based Exim Bank in an effort to protect its customers' interests.

The decision to acquire Padma Bank and unify the institutions was taken at Exim Bank's board meeting on Thursday.

“Our board has decided to proceed with the merger. We'll be signing a memorandum of understanding with Padma Bank on this matter on Monday,” said Exim Bank's Chairman Nazrul Islam Mazumder.

The signing ceremony will take place at Bangladesh Bank in the presence of Governor Abdur Rouf Talukder.

The specifics of the deal will be outlined by the legal teams of both banks in line with Bangladesh Bank's guidelines.

Exim Bank's Managing Director Mohammad Feroz Hossain, conveyed the board's decision to Bangladesh Bank officials on Thursday.

Upon leaving the central bank, he told reporters, “Talks [over the merger] are ongoing. A meeting will be held today. The merger will happen. The details will become clearer after the meeting.”

Bangladesh Bank said it will release guidelines for the merger before the process is finalised.

Asked about the merger of Padma and Exim Bank, the central bank's Executive Director Mezbaul Haque, said, "Bangladesh Bank has allowed banks until December to opt for voluntary mergers. Should the banks reach an agreement to merge, we will proceed in accordance with the law."

The decision on the new name for the merged entity will be made by the banks themselves, he added.