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Specialized and Private Banks Face Closure Over Mismanagement

Industry: Bank, Financial

Several specialized and private banks in Bangladesh face imminent closure due to mismanagement and financial instability. The Bangladesh Bank failed to intervene effectively to save these banks, leading to dire consequences. Notably, Bangladesh Commerce Bank and Oriental Bank have been rebranded under ICB Islami Bank. Similarly, Shilpa Ren Sanstha merged with Bangladesh Shilpa Bank to form Bangladesh Development Bank (BDBL), which is now set to merge with Sonali Bank due to financial struggles. Padma Bank, National Bank, Rajshahi Agricultural Development Bank (RAKAB), and BASIC Bank are also on the brink of collapse. These banks collectively hold defaulted loans amounting to significant sums, with safety reserve and capital deficits exacerbating their financial woes. Economists criticize Bangladesh Bank for failing to investigate and take timely action against banking irregularities, emphasizing the need for stringent enforcement of laws to prevent such crises. Despite attempts by Bangladesh Bank to intervene through appointing observers and dissolving boards, many banks have failed to comply, resulting in further deterioration.

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