Muhith again defends allowing new banks
Finance Minister AMA Muhith yesterday defended the decision to allow opening of new banks, saying the lenders that are not doing well would automatically merge.
"I am not worried about it…There is no cause for concern," he told reporters at his secretariat office when asked whether the opening of new banks would create a risk for the banking sector.
Muhith said banking services were yet to reach many people and the expansion required more banks.
In Bangladesh, there are 57 banks at present, many with their financial condition and governance in dire straits.
The performance of the nine banks that started operations in 2013 is not good.
Of them, Farmers Bank and NRB Commercial Bank saw massive changes in their board, including in the posts of chairmen.
Farmers Bank Chairman Muhiuddin Khan Alamgir, also a former home minister, was forced to resign.
Against this backdrop, the BB is going to provide licences to set up three new banks under the finance ministry's directive. Muhith was also asked about the recent changes in the boards of a number of private banks.
The minister, without mentioning any name, said a business group has been borrowing heavily from the market and buying other banks. The government is looking into it.
In recent times S Alam Group has taken control of a good number of private banks by way of purchasing shares, including that of Islami Bank Bangladesh.
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