The Bank of England aims to develop new regulations governing bank mergers and acquisitions

The Bangladesh Bank (BB) is in the process of drafting a "Bank Resolution Act" to manage bank mergers, acquisitions, liquidation, or recapitalization. A committee within the central bank has been working for two years to prepare this draft, which is expected to be released soon. At the 3rd Bangladesh Economic Summit organized by Bonik Barta at the Pan Pacific Sonargaon in Dhaka, Bangladesh Bank Governor Ahsan H Mansur indicated that the act would empower the central bank to make policy decisions related to mergers, acquisitions, and recapitalization.

Governor Mansur highlighted the importance of this act amidst current challenges, as several banks are struggling to meet depositor obligations. BB officials noted that the regulator is exploring alternative support options for these banks, despite their access to liquidity in the inter-bank market. However, under the current governor's leadership, BB will avoid making hasty decisions on mergers or acquisitions.

The Bank Resolution Act was also discussed in a recent meeting at BB headquarters, attended by managing directors and CEOs from 17 banks, including Sonali, Agrani, Janata, Rupali, BRAC, Mutual Trust, City, Dhaka, Dutch-Bangla, Eastern, Pubali, Prime, NCC, Mercantile, Premier, Jamuna, and Southeast Bank. Organized by BB's Department of Offsite Supervision, the meeting focused on the potential impact of the act, with one attendee suggesting that some banks may face mergers or acquisitions soon.

Additionally, the governor urged these banks to extend liquidity support to struggling banks under BB's guarantee. Topics of foreign exchange, remittance inflow, and overdue foreign payments were also discussed. Following the meeting, BB spokesperson Husne Ara Shikha confirmed that banks with surplus cash were encouraged to support weaker banks, and that certain banks were advised to promptly address overdue foreign payments, now reduced to around $400 million from a previous $2 billion.