12:00 AM, April 09, 2012 / LAST MODIFIED: 12:00 AM, April 09, 2012

Nod to 6 more new banks

Central bank rules out political consideration

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Rejaul Karim Byron

L-R: HM Ershad, Union Bank; MK Alamgir, Farmers' Bank; Fazley Noor Taposh, Modhumati Bank; HN Ashikur Rahman, Meghna Bank.

The Bangladesh Bank yesterday gave the go-ahead for six new private banks, all linked with either lawmakers of ruling Awami League and Jatiya Party or influential persons.
BB Deputy Governor Sitangshu Kumar Sur Chowdhury told reporters that the new banks were approved after “proper evaluation” and without any political consideration.
He said those who submitted applications for setting up the banks are all citizens of Bangladesh and their political identities had nothing to do with the approval.
One of the six is Union Bank Ltd. HM Ershad, former military dictator and chief of AL's ally Jatiya Party, is a director of the bank and JP International Affairs Secretary Golam Masih is among its 19 shareholders. Shahidul Alam has been named the chairman.
Prime Minister Sheikh Hasina's close relative and AL lawmaker Fazley Noor Taposh is among the 38 sponsor shareholders of Modhumati Bank Ltd. Humayun Kabir is its proposed chairman.
There are 22 sponsor shareholders of Meghna Bank. Prominent among them are HN Ashikur Rahman, a ruling party MP from Rangpur-5 constituency, and Nasrul Hamid, AL lawmaker from Dhaka-3.
The 13 directors of Farmers' Bank Ltd include Mohiuddin Khan Alamgir, AL lawmaker and a parliamentary standing committee chairman.
South Bangla Agriculture and Commerce Bank has Dhaka University teacher and Ghatak Dalal Nirmul Committee leader Abdul Mannan Chowdhury as one of its 14 directors. Another director, Kazi Abdul Mazid, worked as managing director of different banks, Premiere Bank being the latest.
The number of Midland Bank's directors is 32. Its main sponsor is M Maniruzzaman Khandker, the prime minister's income tax adviser and chairman of Karmasangsthan Bank.
Yesterday, Deputy Governor Sitangshu Kumar told reporters that the applicants, who got the Bangladesh Bank nod, will be given licences if they submit necessary papers in the next six months.
The banks will be told to set up their head offices outside the capital, he said.
Due to pressure from the government high ups, the central bank at the end of the last year against its will invited applications seeking licences for new banks, sources said.
Of the 37 applications submitted, 16 were short-listed. Finally, a BB Board meeting with Governor Atiur Rahman in chair picked the six yesterday, a top central bank official said.
Earlier on Thursday, the central bank also approved three other banks sponsored by non-resident Bangladeshis.
Two board members Mohammad Tareque and Prof Sanat Kumar Saha were not present at yesterday's meet. They also did not attend the earlier board meeting where approval to new banks was discussed.
The BB placed to the board a number of justifications behind allowing new banks. It said since bank licences were last issued in 2000-01, there had been many significant developments in economy.
In FY2000-2001, the country's GDP was TK 2,160 billion which increased to TK 3,850 billion in FY 2010-11 at constant market price, it added.
Data on import, export and remittance in the last 10 years was also presented in the meeting.
The BB said the economy has grown and the banking system has become more competitive. But still a large number of people are under-banked in Bangladesh.
According to a recent survey of Institute of Microfinance, only 45 percent of nearly 9,000 households surveyed have access to loans from banks and micro-finance institutions.
The central bank said the new banks would help improve the service quality of banking by increasing competition in this sector.

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