BB asks SoCBs to involve pvt lenders

The central bank advises five state-owned commercial banks (SoCBs) to involve private banks in funding a maiden gold refinery in Bangladesh in a bid to diversify any risk of investment.
The suggestion was made at a meeting held at the Bangladesh Bank (BB) headquarters in Dhaka on Thursday to discuss financing by Sonali Bank, Janata Bank, Agrani Bank, Rupali Bank and Bangladesh Development Bank Limited (BDBL) in the project. BB Governor Fazle Kabir was in the chair.
Sheikh Mohammad Salim Ullah, secretary of the Financial Institutions Division under the Ministry of Finance, Ziaul Hasan Siddiqui, chairman of Sonali Bank Limited, and chief executive officers (CEOs) and managing directors (MDs) of the SoCBs were also present at the meeting.
The authorities concerned were advised to revise the debt-equity ratio to 60:40 instead of 70: 30 for enhancing equity participation of the country's first-ever gold refinery to be set up by Bashundhara Group on the outskirts of the capital, Dhaka.
Excepting BDBL, the four other SoCBs are allowed to invest 10 per cent of their capital in line with single-borrower exposure limits on the basis of the memorandums of understanding (MoU) of the BB.
Sources, however, hint that the single-borrower exposure limits of four SoCBs might be enhanced to 15 per cent from 10 per cent only for investment in Bashundhara Gold Refinery project.
On the other hand, BDBL is entitled to invest 15 per cent of their total capital in a line with single-borrower exposure limit.
The exposure limit of BDBL will remain unchanged for the investment in the gold-refining project, they say.
"We've asked the SoCBs to include participation of PCBs for diversification of investment risk in Bashundhara Gold Refinery project," a BB senior official told the FE after the meeting was over.
The SoCBs have also been advised to invest in the project along with PCBs considering portfolios management for diversifying risk, the central banker added.
Talking to the FE, a top policymaker of a leading state bank said the SoCBs will act in line with the BB's advice for investment in the new gold-refinery project. "We'll invest in the project considering risk."
In July 2021, the central bank issued guidelines on issuing enlistment to gold refinery companies to import raw gold ores or semi-refined gold ores.
Under the guidelines, the central bank authorised Bashundhara Group to import raw gold ores or semi-refined gold ores.
Prior to BB's approval, Bashundhara had secured the commerce ministry's approval to set up a gold-refinery plant in Bangladesh.

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