Five new banks get final nod

Bangladesh Bank yesterday decided to award licences to five new banks to allow entry of a fourth set of private banks in the country.
Chief executive officers of the five banks presented their business plans at a board meeting of the central bank, chaired by Governor Atiur Rahman.
BB Deputy Governor SK Sur Chowdhury told reporters after the meeting that the banks will now get registered with the Office of the Registrar of Joint Stock Companies and Firms to set up banking companies.
After that, the central bank will issue licences in the name of the banks, he said.
Though names of six banks were placed at the BB board meeting, the proposal for awarding a licence to Midland Bank was put on hold for now.
The BB deputy governor said, as the board was not satisfied with the business plan of Midland, it was asked to present its revised plan in the next board meeting.
The main sponsor of Midland Bank is M Moniruzzaman Khandker, who is the income tax adviser to the prime minister and chairman of Employment Bank.
The BB deputy governor said, after a detailed inspection into the five banks, they will be given permission to open branches and start business activities.
The central bank in April 2012 approved nine 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 the existing rules and regulations within six months, and to arrange Tk 400 crore as their paid-up capital.
Awarding licences to another three banks -- Modhumati Bank, Farmers Bank and NRB Global Bank -- is still underway.
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 nationalisation 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.