Bangladesh Bank on Tuesday gave final approval to five proposed banks for getting licences.
Five new banks get final nod
The five proposed banks which got the approval are NRB Commercial Bank, NRB Bank, Union Bank, South Bangla Agricultural Bank and Meghna Bank. ‘The BB gave the approval at its board meeting after hearing the business plans presented by the five proposed banks,’ BB deputy governor SK Sur Chowdhury told reporters after the board meeting at the central bank headquarters in the capital.
He said that the managing directors of three proposed banks — Midland Bank, Meghna Bank and NRB Bank — presented their business plans at Tuesday’s BB board meeting. Earlier on Sunday, three other proposed banks — NRB Commercial Bank, Union Bank and South Bangla Agricultural Bank— had presented their business plans at a BB board meeting.
Sur said that of the six proposed banks, five proposed banks had got the BB’s final nod while Midland Bank had been asked to clarify its business plan at the next BB board meeting.
He said, ‘The BB board has asked the five proposed banks to be registered with the Registrar of Joint Stock Companies and Firms as early as possible. Once the RJSC registers the proposed banks, the central bank will provide them with licences.’ A BB official told New Age on Tuesday that the central bank was compelled to give the final approval to the five proposed banks hastily.
He said that the BB had to complete the scrutiny process in the last two holidays — Friday and Saturday — amid political pressure. The central bank in April last year issued letters of intent to the sponsors of nine proposed banks including three banks to be set up by non-resident Bangladeshis.
Three proposed banks will get final approval from BB in next few months. The sponsors of the selected proposed banks are either from ruling party-led alliance or businessmen backed by the ruling party. HN Ashequr Rahman, a member of parliament of Awami League, is the chairman of proposed Meghna Bank and Iqbal Ahmed, a Bangladeshi-origin British entrepreneur, is the chairman of proposed NRB Bank, and Farasat Ali is chairman of the proposed NRB Commercial Bank.
The prime minister’s income tax adviser, M Moniruzaman Khondokar, is the chairman of proposed Midland Bank. The application submitted by Union Bank has named Shahidul Alam as the bank’s chairman and one of its sponsors is Golam Mosih, a presidium member of Ershad-led Jatiya Party. Jatiya Party chief HM Ershad is the key sponsor of the bank.
The chairman of proposed South Bangla Agriculture Bank is SM Amzad Hossain who has blessing from the high-ups of the government.
SM Amzad was accused of ‘fraudulence’ as his company Lockpur Fish Processing Company took around Tk 45 crore in loans from Premier Bank by showing fake export bills and by exporting inconsumable consignments to the USA in 2001. Documents submitted by Premier Bank to Bangladesh Bank showed that Premier Bank purchased export bills worth Tk 28.83 crore from Lockpur against the company’s fish consignments which were sent to the USA. But the export bills were rejected by the buyer in the USA and the company’s consignments were destroyed by the US Food and Drug Administration because of presence of bacteria in the consignments, showed a loan rescheduling agreement signed between Lockpur and Premier Bank on June 30, 2005.
Besides, the company also sold exports bills worth Tk 16.74 crore, although there was no export at all, said the agreement. ‘Subsequently, it has been detected that the Borrower [Lockpur] with fraudulent intention to defraud the bank exported the unconsumptionable consignments having bacteria for which the said consignments were destroyed the USFA,’ said the agreement signed Amzad, an official of the bank and two witnesses. ‘It has further been detected that the Borrower with fraudulent intention submitted fake shipping documents and had the bills negotiated and purchased by the bank and received the equivalent money from the bank against these fake bills. The Borrower then committed serious fraud,’ said the agreement. Amzad, who was the then managing director of Lockpur, evaded legal action from the bank by agreeing to repay the loans with a number of conditions of the bank. Premier Bank officials said that the company failed to repay the most part of the loans in time and another loan rescheduling agreement was signed in 2011. The bank has given the company till 2015 to repay the loan. Amzad told New Age on Tuesday that the loan issue with Premier Bank was an old one and it was not logical to raise the issue now. He said that the default loan had been rescheduled by his company and he was disbursing the loan in regular installment. He said, ‘The deed was held in 2005 between Premier Bank and my company, so it is not logical to raise question regarding this issue now.’
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.
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