Bangladesh Bank board of directors will hold a meeting on August 24 to decide on issuing licences for setting up new banks amid hectic lobbying of ruling party leaders and loyalists with the government to get licences.
The meeting will review the performances of the existing banks and discuss whether licences for new banks should be given.
Finance minister AMA Muhith on July 24 said that the government would give licences for more banks as per a political decision.
But the Bangladesh Bank had earlier opposed giving more licences for banks saying that the existing 47 banks were enough for the country.
A senior official of Banking Regulation and Policy Department of BB on Tuesday said that they conducted a performance evaluation of the existing banks the report of which will be placed in the next board meeting.
Earlier, the finance ministry had directed the central bank to carry out a complete survey of the existing banks to decide on the prospect of new banks.
The ministry also asked BB to start the process of inviting applications for new banks licenses.
Meanwhile, approximately 20 proposals have already been submitted to the finance ministry.
A high official said that five applications were likely to be considered for licenses for new banks.
He said, 'One advisor of the prime minister, a parliamentary standing committee chairman, two members of parliament of the ruling party in alliance with some businessmen have been top on the list for getting licences for setting up new banks.
Of the 47 banks now operating in the country, four are state-owned commercial banks, four are specialized banks, thirty are private commercial banks and nine are foreign banks.
Former deputy governor of the BB and chairman of Bangladesh Krishi Bank, Khandker Ibrahim Khaled, earlier told New Age that there was no need for new commercial banks as the number of existing private commercial banks was enough for the economy.
He opined that the new banks would be burdensome for the economy and would prevent the existing banks from expanding and improving their services.
Thirteen new private banks were given permission between 1999 and 2001 by the last Awami League government.
The BB, in a survey on the prospects of new banks, found that 'most of the banks were given permission on political consideration as owners were close to the ruling party.'
According to the rules, a new bank's prospective owners have to show paid-up capital of at least Tk 400 crore to get a licence.
The total number of branches of all the bank is 7,019, of which 2,971 are located in the urban areas and 4,048 in the rural areas.
Source : New Age
