Indian Finance Minister, Nirmala Sitharaman announced the conversion of 10 public sector banks into four strong banks on 29 August 2019. He also announced capital support of Rs 550 billion for the merger process.
In 1998, some East Asian countries, including Thailand, Malaysia, Indonesia and South Korea, benefited from forced mergers of banks. Thailand spent $4.3 billion to reform its banking sector, while Indonesia spent $4 billion and Malaysia $1.3 billion.
In a similar process, Bangladesh will have to pay huge sums of money as capital support to the respective banks. Some banks have already informed Bangladesh Bank about the amount required in this process.
The amount has not been finalized yet, but insiders estimate the total cost to be Tk 600 to Tk 700 billion.
