Chairman Mohammad Sadiqul Islam stated that the decision regarding the merger lies with the central bank. However, Dr. Md (RETD) Rezaul Haque disagrees, arguing that the bank’s current standing doesn’t warrant a merger.
Highlights
- SIBL Chairman states the merger decision will come from Bangladesh Bank.
- Director Rezaul Haque is firmly against the merger.
- Chairman mentioned loans to S Alam Group but noted strong collateral.
- The director insists SIBL is not in poor condition and recalls previous dividends.
There are differing views within Social Islamic Banks Inc. (SIBL) concerning potential mergers prompted by Bangladesh Bank’s restructuring plans.
On September 4th, Bangladesh Bank conducted its final preliminary meeting with SIBL, which followed talks with four other Islamic banks, including Global Islami Bank.
Several attendees were present in person, while Governor Arsan H. Mansour joined virtually.
After the meeting, Chairman Sadiqul remarked, “The discussion today didn’t focus directly on a merger. We shared our financial status, and the Bangladesh Bank provided its financial stability report.”
He added, “We adhere to principles, but the final decision rests with Bangladesh Bank.”
Contrarily, Superintendent Rezaul communicated to the central bank that SIBL could recover without merging if entrepreneurial shareholders received interest-free liquidity support.
When asked about the merger, he expressed concern, saying, “Our banks aren’t in bad shape. Why push for a merger? I offered cash dividends of up to 20% from 2012 to 2016.”
Addressing worries about significant loans, Sadiqul acknowledged that S Alam Group owes TK6,000 crore to SIBL, but he claimed this arrangement is more manageable compared to others.
He noted, “We maintain about 35% collateral on these loans, which is more robust than many banks. Nearly 60% of default loans could be restructured with regulatory help.”
Sadiqul also recognized that hidden debts linked to SALAM later emerged, increasing pressure on the banks. “These are ongoing challenges, but we conveyed our circumstances to Bangladesh Bank.”
Regarding a reported request for a one-year postponement of the merger decision, he clarified that it was a personal application from an individual and not an official stance of the bank.
