A proposed new bank with cricket-star Shakib as one of the sponsor director fails to set sail as the central bank denies it licence for failing to comply with the set conditions, including raised capital base.
The board of directors of the Bangladesh Bank (BB) took the decision in a meeting held at its headquarters in Dhaka on Thursday, with BB governor Fazle Kabir in the chair, officials said.
"Our board of directors did not approve further time- extension proposal of the People's Bank," BB spokesperson and executive director Serajul Islam told the FE after the meeting was over.
He said the deadline for execution of the letter of intent or LoI was December 31, 2021 but the proposed bank failed to comply with the BB rules and regulations within the timeline.
The latest BB move came against the backdrop of non-compliance with the conditions on LoI, issued by the central bank as preconditions for starting business by the proposed People's Bank Limited.
On February 17, 2019, the central bank issued the LoI to three proposed private commercial banks (PCBs) -- Bengal Commercial Bank, Citizen Bank and People's Bank -- with strings attached to it, the principal one being Tk 5.0 billion as paid-up capital instead of the existing Tk 4.0 billion.
Out of these three, Bengal and Citizen Banks have already started their operations but People's Bank failed to meet the regulatory requirements, including paid-up capital, and prayed for more time.
"The proposal of People's Bank has automatically has its death as the proposed lender failed to meet our requirements by December 31 last," another BB senior official told the FE while replying to a query.
He mentions that the central bank had asked the proposed bank to start its business by the deadline complying with all the regulatory requirements.
"But the proposed bank had submitted a fresh list of directors instead of starting its business," the central banker notes.
The proposed PCB, sponsored by an expatriate, in the meantime, submitted a fresh 22-member board of directors, including star cricketer Shakib Al Hasan and his mother, Shirin Akhtar, to the central bank instead of earlier 12 members for consideration.
Actually, 11 proposed directors out of 12 have been changed on the fresh list, according to the BB official.
Along with the star cricketer, Abul Kashem, chairman of the proposed bank, met BB Governor Fazle Kabir on December 21 with the request for extending the timeline for establishing the bank company.
After Awami League had formed the government in 2009, nine banks were given the green light despite opposition from different quarters.
Shimanto Bank Limited, owned by the Border Guard Bangladesh (BGB) Welfare Trust, was offered licence in 2016.
Two years later, the BB board gave the final approval for the Community Bank.
Earlier on February 23 last calendar year, the central bank licensed Bengal Commercial Bank Limited in line with its board-of-directors decision.
Currently, there are 60 banks in Bangladesh, of which 42 are local private banks, nine foreign and another nine state-owned lenders.
© 2024 - All Rights with The Financial Express
