Staff Correspondent

Padma Bank PLC, a fourth-generation bank that has been struggling for several years, has initiated the official process to merge with Shariah-based private commercial Exim Bank PLC.

Padma Bank Managing Director Tareq Reaz Khan and Exim Bank Managing Director Mohammad Feroz Hossain signed a memorandum of understanding (MoU) in this regard at an event at Bangladesh Bank on Monday.

"From now on, Exim Bank will be responsible for all clients of Padma Bank. There will be nothing named Padma Bank," Nazrul Islam Mazumder, Chairman of Exim Bank, said following the MoU signing ceremony.

He said, "The merger agreement between Padma Bank and Exim Bank has been completed. Depositors' money will remain secure, and no employee will lose their job."

The Bangladesh Bank governor Abdur Rouf Talukder and other high-ups were also present at the signing ceremony.

According to the officials, the private banks will now apply for the completion of the merger process.

Padma Bank, born as Farmers Bank in 2013 after the government approved licences for nine new banks, faced survival challenges just three years after its inception. Its ownership and management underwent a significant overhaul in 2017 to prevent its total collapse.To rescue the Farmers Bank from financial distress, the government stepped in with a financial lifeline. Upon its rebranding as Padma Bank in 2019, it reported a colossal amount of soured loans.

Exim Bank’s operations started in 1999. At present it is an Islamic bank. It was listed on the stock market in 2004.

Earlier, the Bangladesh Bank gave a nod to the merger of Union Capital with Prime Bank, a commercial private bank. However, due to various complications, it has not been implemented yet.