Bank mergers aim to prevent unfair gain
Bangladesh Bank has undertaken an initiative towards consolidation within the country's banking sector. For quite some time, certain banks in the country had been struggling to operate effectively. To address this situation, initiatives for consolidation have been taken primarily within the banking institutions. By consolidation, we refer to a scenario where two establishments merge to manage operations collectively. It's essential to note that consolidation doesn't always entail a merger of weaker entities with stronger ones or vice versa. Even entities of similar strength can engage in consolidation. The primary objective of consolidation is to strengthen market presence through increased organizational activities or to enhance competitiveness. When one entity acquires another, it's termed as acquisition. Typically, a well-performing entity is considered an acquiring institution, as it continues its commercial endeavors. Both consolidation and acquisition aim at ensuring profitability. Alternatively, if a weaker entity exists, it may be allowed to sustain within the market by providing a competitive environment without being forced out.
