The new private banks are – Union Bank, Midland Bank, Madhumati Bank, Farmers Bank, South Bangla Agriculture and Commerce Bank, and Meghna Bank.
CONTROVERSY & CRITICISM
The move to allow more private banks has drawn criticism for several quarters. Critics say the decision is 'politically motivated', especially in view of the ruling party leaders associated with them.
Replying to criticism, finance minister had earlier said that "approving new banks is solely a matter of government's political wish". The board resumed its meeting at 1:30 pm on Sunday to decide the fate of applications, according to the deputy governor."The proposals are being scrutinised in detail," he had said last week.
Asked whether the new banks were cleared on political considerations, Shur on Sunday said, "All of them who got their bank proposals cleared are citizens of Bangladesh."
"The decision to give licenses to the six banks was taken after scrutiny in detail," he reiterated. "No political consideration worked there."
CONDITIONS
The new banks were given clearance with certain conditions, Shur said.
The conditions lay down that the new banks will have to submit their commercial plan to the central bank within six months and deposit Tk 4 billion as paid-up capital before starting operations.
The new banks will have to have 'white-money' as capital, Shur said.
The banks will also have to set up most of their branches outside Dhaka, he said, adding, "The move to set up headquarters outside Dhaka will be encouraged."
The Bangladesh Bank on Apr 4 approved three banks sponsored by non-resident Bangladeshis (NRBs).
Promoters of two NRB banks, US-based Nizam Chowdhury and UK expatriate Iqbal Ahmed, had proposed identical names for their NRB banks.
They proposed naming their bank as NRB Bank Limited. But the central bank said the name would be changed through discussion.
Another US expat Farashat Ali proposed his bank to be christened as NRB Commerce Bank Ltd.
The board had, however, not been able to give go-ahead to new private banks for which it had received as many as 37 applications. It had adjourned the meeting to Sunday.
On Sep 27 last year, Bangladesh Bank issued a circular seeking applications for new banks. Interested entrepreneurs were asked to apply by Nov 30, along with a Tk 1-million non-refundable deposit.
A condition was also attached to keep loan defaulters at bay.
Other conditions to apply included a paid-up capital of Tk 4 billion, holding of a maximum 10 percent share by an individual sponsor, keeping not more than 13 members in the board and providing the bank capital from the investors' assets or income as declared in the income tax statement.
The list had been sent to the Prime Minister's Office and the finance ministry, and then returned to the central bank after further scrutiny.
