BDBL signs vendor's agreement with finance ministry Dec 31

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Nazmul Ahsan
The formal launch of the Bangladesh Development Bank Ltd (BDBL) is going to take place on next December 31 as a vendor's agreement between the Ministry of Finance (MoF) and the BDBL is set to be signed on the same day, officials said.
With the signing of the agreement, assets worth Tk 25.69 billion and liabilities worth Tk 14.15 billion of the Bangladesh Shilpa Bank (BSB) and the Bangladesh Shilpa Rin Sangtha (BSRS) will be vested in the new Bank.
The assets and liabilities of both BSB and BSRS is based on the estimate done by a chartered accountancy firm as of August 31, 2008.
The BDBL came to the being on November 11 last after Bangladesh Bank issued license in its favour.
Earlier, Prime Minister Sheikh Hasina approved the merger of BSB and BSRS in October, facilitating the setting up of the BDBL.
MD Rizwanul Huda, deputy secretary, MoF and Nazem Ahmed Chowdhury,, Chairman, BDBL, will sign the Vendor's Agreement in favour of the government and the BDBL respectively, sources said.
The Head office of BSB at Rajuk Avenue will be the new Head office of BDBL. The New Bank will start its journey with a workforce of 835. Not a single employee or official of the BSB and the BSRS will be retrenched, MoF officials said.
"The vendor's agreement between the government and the new bank will be signed on December 31, while its official activities will start from January 3, 3010,' a top official in the MoF said.
"Around 200 to 300 new employees and officials will be recruited for BDBL soon."
Recently, the paid-up capital of BDBL was raised to Tk 4.0 billion, while members of Board of Directors were also appointed.
The incumbent Managing Director of BSB and BSRS, Mizanur Rahman, was appointed as the Managing Director of BDBL, sources said.
The move to merge the two ailing state-owned development financing institutions was undertaken during the period of the military-backed interim government.
The BSRS has more than 200 officers and employees at its headquarters and two branches. It started its journey in 1972 with the assets and liabilities of the erstwhile Pakistan Industrial Credit and Investment Corporation Ltd, Investment Corporation of Pakistan and National Investment Trust, which ceased to operate after the independence of Bangladesh.
Since its inception up to 1985, the BSRS kept limited its activities to providing long-term loans and financing debentures. It then expanded its operations to support financial institutions in giving industrial credit and carried out merchant banking operations until 1995.
The operational activities of this specialised bank came virtually to a halt, with classified loans accounting for 85 to 90 per cent of its total portfolio between 1998 and 2001, sources said.
The bad loan portfolio, however, came down gradually as the bank more or less stopped fresh lending operations due to lack of funding support from the government as it had little or no deposit base.
Its classified loans were 85.02 per cent in 2002, 65.80 per cent in 2003, 63.15 per cent in 2004, 61.13 per cent in 2005 and 54.07 per cent or Tk 1257.0 million (125.70 crore) in 2006, the sources said.
However, the classified loans of BSRS declined to 34 per cent in fiscal 2008-2009.
The situation was almost the same for the BSB, though it tried on its own to expand its deposit collection, apart from rescheduling the previous loans. It also made good use of the credit fund it managed to obtain from the central bank from time to time, the officials said.