The central bank of Bangladesh has been forced to issue a statement to clear the air, as it were, of the confusion arising out of its initiative to bring about consolidation in the country's ailing banking sector. As a necessary part of the process aimed at reducing the number of banks in the country, the sector is going to witness a number of mergers between previously disparate entities in the coming days.

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Five merger proposals have already been received and  are expected to be approved by the end of 2024. They involve around 11 institutions, and if completed as proposed, would reduce the number of banks in Bangladesh by 6 - around 10% of the total.

Yet the unprecedented nature of these moves in the banking sector, where there is no previous record of two Bangladeshi banks having merged, has led to a state of panic and confusion among members of the public, to the extent that people are reportedly withdrawing their deposits from certain banks, said sources at some respected banks.

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They said most of the depositors are suffering from the dilemma of whether or not to keep money in the bank. Some are withdrawing their money from the banks due to 'fear'.

Bangladesh Bank was forced to address the issue in its statement today, asserting that individual as well as institutional depositors' money will remain fully safe and secure in banks during the merger process.

Noticing different news and social media posts, the central bank said accountholders of two merging banks will be able to maintain their respective accounts as before even after the completion of the merger.

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The merger process will be completed based on the consent of the entrepreneurial directors, current boards, and common shareholders of the banks covered by the merger, said the statement.