State-owned Sonali Bank and Bangladesh Development Bank PLC (BDBL) have finally decided to start proceedings to merge their operations today. 

As such, Sonali and BDBL today signed a memorandum of understanding at the Bangladesh Bank. 

The development comes after state-run bank last month got approval from its board to merge with Sonali Bank, the largest bank in the country.

Bangladesh Bank Governor Abdur Rouf Talukder, Sonali Bank Chairman Ziaul Hasan Siddiqui, its Managing Director and CEO Md Afzal Karim and BDBL Chairman Shamima Nargis, and its Managing Director Md Habibur Rahman Gazi were present among others at the event. 

Ziaul Hasan Siddiqui said they took the time to scrutinise the agreement thoroughly before signing the deal.  

"We have taken the decision by ourselves and without any influence. We then approached the Bangladesh Bank governor and informed him that we want to merge with BDBL."

In 2009, Bangladesh Shilpa Bank and Bangladesh Shilpa Rin Sangstha merged to form BDBL. 

The new entity is still creaking under the weight of bad loans.

The NPLs of BDBL stood at Tk 982 crore in December, which made up 42.46 percent of the disbursed loans.

On the other hand, Sonali had loans of Tk 93,096 crore as of December 2023.

Of the sum, Tk 13,150 crore had turned sour, which was 14.1 percent of the total credits disbursed, BB data showed.