The
central bank has approved six more private commercial banks (PCBs), aiming to
help strengthen the ongoing financial inclusion programmes through bringing
unbanked people under the banking network, Bangladesh Bank (BB) officials said.
The
decision came at a meeting of the BB's board of directors, held at its central
office Sunday, with BB Governor Atiur Rahman in the chair.
The
six approved PCBs are:
Union Bank Limited,
Modhumoti Bank Limited,
the Farmers Bank Limited,
Meghna Bank Limited,
Midland Bank Limited
South Bangla Agriculture and Commerce Bank
Limited.
"The
board has approved the six PCBs after a thorough scrutiny of all 16
short-listed applications one by one," Deputy Governor of the BB SK Sur
Chowdhury told reporters after the meeting.
He
also said the board has also decided to issue letters of intent (LoI) to the
approved six PCBs, giving them a period of six months to comply with the
existing rules and regulations for setting up new commercial banks.
"We'll
issue licenses to the PCBs after their proper compliance with all
conditionalities," Mr. Sur said, adding that loan defaulters and tax
evaders would not be allowed to be the directors of new banks.
The
proposed chief executive officers (CEO) of the approved PCBs will have to
present their business plan before the board, he said while explaining the
conditionalities for the new banks.
The
authorities concerned of the approved PCBs will have to deposit the amount of
their paid-up capital worth Tk 4.0 billion with the central bank, before
starting their operation, the BB deputy governor added.
"All
the applicants are Bangladeshi citizens. The BB board has considered those who
were found eligible, based on their qualifications," he said replying to a
query if the approvals were given only to Awami League (AL)-affiliated people.
The
proposed chairmen of newly-approved banks are: Union Bank Limited -- Shahidul
Alam, Modhumoti Bank -- Humayun Kabir, Farmers Bank -- Dr Mohiuddin Khan
Alamgir, Meghna Bank -- AHN Ashiqur Rahman MP, Midland Bank -- Moniruzzaman
Khandker and South Bangla Agriculture and Commerce Bank -- SM Amjad Hossain.
"Since
bank licences were last issued in 2000-01, there have been many significant developments
in the Bangladesh
The
economy has grown and the banking system has become more competitive but there
are still a large number of under-banked people in Bangladesh
Recent
estimates from a survey conducted by the Institute of Microfinance found that
only 45 per cent of the nearly 9000 households surveyed do have access to banks
and micro-finance institutions (MFIs) for loans.
The
population per branch (21065) and the ratio of loan accounts per 1000 adults
(42) suggest that the outreach of the formal financial sector in Bangladesh is
lower than that in India (14485 and 124 respectively) and Pakistan (20340 population
per branch and 47 loan accounts per 1000), according to the statement.
"As
such, the new banks will help increase the quality of banking services by
increasing competition in the banking sector. They will also be able to meet
the unfulfilled demand for credit by the private sector whose needs have grown
in line with a fast expanding economy," it noted.
Moreover,
for new banks the ratio of opening rural and urban branch will be 1:1 which
will help increase bank branches in rural areas and improve financial
inclusion, the central bank said.
Earlier,
37 applications were submitted to the central bank for setting up of new PCBs.
Of them, 21 were rejected by a preliminary scrutiny committee mainly due to
lack of necessary papers and documents.
Last
Thursday, the central bank approved three new commercial banks sponsored by
non-resident Bangladeshis (NRBs) to help boost the inflow of foreign exchange.
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