The Board of Directors of National Bank has decided not to merge with United Commercial Bank (UCB). In a meeting last Saturday (April 27), the bank's board decided not to merge with UCB, people familiar with the matter told The Business Standard.

An official of the National Bank told TBS on condition of anonymity, 'After being informed about the merger of the National Bank by the Central Bank, the board of the National Bank has verbally decided that the bank will not go for the merger. On Saturday, the final decision was taken in the board meeting again not to go for the merger. Everyone including the chairman of the board agreed with this opinion.

He also said, 'Without any kind of discussion, the Central Bank decided to merge with UCB. On April 9, the last working day before Eid, fear spread among the depositors and officials knowing this decision. Many people started withdrawing money from the bank.

The official said that out of 211 branches of National Bank, 200 branches are now making profit.

This National Bank official also said, 'Some branches in Dhaka are in losses due to high defaulted loans. In the meantime, we have started collecting loan money from big defaulting customers.'

He said, National Bank officials at all levels have been called and given an action plan to improve the overall index of the bank. But it will take a few more years for the indicators to turn better.

In a meeting chaired by Bangladesh Bank Governor Abdur Rauf Talukder on April 9, it was decided that National Bank Limited will be merged with UCB. Stakeholders of both banks were present at this time.

The central bank decided to merge some banks to solve the crisis in the financial sector. Bangladesh Bank issued Prompt Corrective Action (PCA) framework for the banking sector last December.

In the light of this, weak banks will be merged at the final stage of various restrictions based on four indicators - defaulted loans, capital situation, management and liquidity situation of a bank.

The central bank has decided that weak banks will be compulsorily merged from March 2025 if they are not voluntarily merged by December 2024.

Then on April 4, Bangladesh Bank issued a policy on how to merge banks.

However, it was decided to merge some banks without following this policy of the central bank. This caused discomfort in the banking sector.

After the initial decision to forcefully merge the five weakest banks, the consolidation process has slowed somewhat due to panic.

Apart from one of these five banks, the remaining four banks do not want to go for the merger, senior authorities said.

The policy making officials of the four banks said that they had to take such a decision under the pressure of the central bank.