Dhaka, Feb. 13 -- Prime Minister Sheikh Hasina recently announced plans to merge the struggling Padma Bank with another banking institution to protect its customers and stabilise the financial sector. However, the merger process is expected to take some time.

More than a dozen other banks are also experiencing financial difficulties due to high levels of default loans and scandals, putting pressure on the banking sector and fuelling debates about potential mergers.

Bangladesh Bank is implementing a year-long prompt corrective action (PCA) for these troubled banks and is developing a strategy for their mergers with more stable banks, according to Mezbaul Haque, a spokesman for the central bank.

The government has endorsed this approach,...