BB starts scrutiny of application for new banks Sunday

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Siddique Islam The central bank will start its work for preliminary scrutiny of the applications for setting up of new private commercial banks (PCBs) from Sunday, in line with its amended guidelines, officials said Thursday. "We'll first examine all applications thoroughly to check whether all relevant papers and documents have been furnished or not," a senior official of the Bangladesh Bank (BB) told the FE. He also said an application will be considered cancelled if the relevant papers and documents were found to be not having been given. During the preliminary scrutiny, the BB officials will check whether feasibility study report, business plan, draft memorandum and articles of association of the proposed banks have been enclosed or not with their applications. Reports about the "biography" of the would-be directors and proof of citizenship in favour of each of them, and the would-be chief executive officers (CEOs) or Managing Directors (MDs) and heads of operation, credit, finance, risk management, internal control, and information technology (IT), along with feasibility reports on the proposed banks, are required o be submitted to the central bank under the provisions of the amended guidelines for setting up of a new commercial bank. "The number of members of the board of directors shall be restricted to 13," the guidelines had said, adding that the CEO of the proposed bank "shall have at least 15 years' experience" in the banking profession. A total of 37 applications have been submitted with the central bank for setting up new PCBs. Among them, 29 applications were submitted alone on Wednesday, the last day for their filing up. The central bank started receiving the applications from October 01 last after announcement of its revised guidelines about establishment of new commercial banks. Senior lawmakers, business leaders and top executives of non-government organisations (NGOs) are among the chairmen of the proposed banks, officials and entrepreneurs said. Many high-profile political leaders, businessmen and foreign nationals are also involved with the proposed banks as sponsors, sources in banking sector said without elaborating. On June 29 last, Finance Minister AMA Muhith told Parliament that the government would invite applications from the interested sponsors who would be willing to set up new banks and life insurance companies. After some initial reservation over the need for allowing the setting up of new private banks, the board of directors of the central bank finally gave its approval on September 14 last for allowing the entry of such new banks to the market. A total of 47 commercial banks including 30 in the private sector are now already in operation in Bangladesh.