The Massachusetts’ agency that regulates banking in the commonwealth heard concerns about the proposed merger between Charlotte-based Bank of America Corp. and FleetBoston Financial Corp. – including accusations of racism against FleetBoston – at a public hearing Tuesday.

The hearing by the Board of Bank Incorporation was part of the petition process which Bank of America must complete to acquire FleetBoston. The Board of Bank is part of the Massachusetts Division of Banks and will decide whether or not the merger should proceed.

Hossam Algabri said FleetBoston terminated his account and accused him of making suspicious transactions consisting of multiple deposits and a large withdrawal in one day. Algabri said other customers regularly make such transactions and he was only targeted because his name sounds Middle Eastern.

American Arab Anti-Discrimination Committee member Merrie Nagjinu said the merger should only go forward if the two banks guarantee racial equality.

Before Algabri testified, State Treasurer Timothy Cahill read a letter of complaint accusing FleetBoston of discriminatory practices toward Muslims.

In response to the letter, FleetBoston President and Chief Executive Officer Charles Gifford said some employees are simply trying to comply with the USA PATRIOT Act, and that complaints filed are immediately investigated.

“Diversity is one of the first values at Fleet,” he said.

But Algabri said he believes FleetBoston’s justification for terminating his account is weak, and he said he has opened an account with another bank.

Officials from Bank of America said the merger would bring economic benefits.

Bank of America Chief Marketing Executive Catherine Bessant said the new company’s “growing employment base” and its aspiration to become the “number one lender to small businesses” would help the economy. She also said the it would continue Fleet’s tradition of charitable giving with a “shared focus on neighborhoods and education.”

Gifford added that focusing on Boston is not the company’s top priority.

“There are more important things than preserving [Fleet’s] Boston base,” Gifford said.

Gifford said the company would focus on serving low- and moderate-income customers and supporting nonprofit organizations. He said the merger would lead to more loans for small businesses and greater diversity. Some “multicultural initiatives” include multilingual tellers and Safe Send, a plan that allows Hispanic customers to transfer money across United States borders.

In an attempt to allay fears of many Boston residents, Cahill said job losses from the merger would be limited.

“There will be a net loss and a net gain,” Cahill said. “You will let some people in and some people go.”

Gifford said both FleetBoston and Bank of America would cut staffs, and many employees would move to new positions.

Bessant also said Bank of America would target the “smallest of the small businesses,” some of which have sales of less than $10 million and less than 100 employees.

If the state approves the merger, it will be “part of a broader trend of consolidation,” said Donald Smith, a Boston University professor in the Finance and Economics Department.

Mergers benefit banks by creating a broader customer base, Smith said. He added that customers would not be hurt as long as local competition continues.