Foreign investment in banking sector

Norfund, a fund raised by Norwegian government for the developing countries, is going to purchase 10 per cent shares of local Mutual Trust Bank Limited (MTBL). As such, Norfund will invest around BDT 1.73 billion to purchase the shares. The bank's board of directors has recently taken a decision that MTBL will issue fresh shares and sell them to Norfund.

This is a great move. By selling the shares, MTBL will enhance its paid-up capital base with a Norfund representative allowed to participate in the board meeting of MTBL. It is hoped that foreign investment in MTBL will help it gain a solid footing in the global arena. The investment will also bring about more transparency and accountability through the best banking practices that should be at par with global standards. Earlier in 2016, World Bank's International Finance Corporation (IFC) had purchased five per cent shares of The City bank.

Very recently, 16 per cent shares of Bkash, the mobile financial service arm of Brac Bank Limited, were bought by Alibaba, a Chinese online business giant. These are really noteworthy developments for the Bangladesh economy. It can be hoped that these moves will also bring about good governance and ensure better banking services.

Mohammad Zonaed Emran

A banker based in Dhaka

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