New banks to get licenses soon

Bangladesh Bank is likely to award licenses to new banks soon to allow entry of a fourth set of private banks in the country.

Six banks, out of nine proposed new banks, have already submitted their business plans to the BB. The board of directors of the BB yesterday completed reviewing the business plans of three banks -- NRB Commercial, Union and South Bangla.

Chief executive officers of the three banks presented their respective business plans to the BB when chairmen of these banks were also present.

“Today's (Sunday's) board meeting has been adjourned. The board will sit again on Tuesday (tomorrow) to review the business plans of the rest three banks,” SK Sur Chowdhury, deputy governor of the central bank, told reporters after the meeting.

These three banks are Midland, Meghna and NRB, he said. The rest three of the proposed banks have sought time to arrange capital, sponsors and other papers before meeting the board of directors of the central bank, the BB official said.

The central bank in April 2012 issued "letters of intent" to nine newly-approved commercial banks, allowing maximum 20 directors in their boards instead of 13.

The BB also asked the proposed chairmen of the banks to comply with the requirements and existing rules and regulations within six months, and to arrange Tk 400 crore as their paid-up capital.

However, the central bank's decision to allow new banks sparked huge debates last year. Analysts said the move would distort the market, which is already saturated with 47 banks in operations.

Following the nationalization of banks after the country's independence in 1971, the BB gave licences to private banks at first in 1983. The second set of such banks was allowed in 1995 and the third set in 2001.

News Source: The Daily star Bangladesh

Dated:- 4-Feb-2013