Govt ready to name Sonali, Janata chief executives
Thursday, 11 October 2007
FE Report
The government is ready to name chief executives for Sonali and Janata banks soon, ending the battle for securing the top posts of the two state-run entities.
"We've almost finalised selection of two persons to head Sonali and Janata," a source at the Finance Ministry said.
The source, however, declined to reveal the names, fearing that the disclosure could trigger counter-lobbying from the contenders who would lose the battle for the top jobs.
A total of 10 persons, mostly former heads of nationalised commercial banks (NCBs), applied for the top jobs and, of them, nine applicants appeared before the interview board, Finance Ministry sources said.
The sources also said the ministry has already forwarded the names of the two persons to the World Bank for its backing.
"If the World Bank gives its clearance, we'll issue joining letters in favour of the selected persons after Eid vacation," a source disclosed.
The fray for winning the top posts at Sonali and Janata has generated curiosity and interests in the country's banking sector, particularly against the backdrop of the process of corporatisation of NCBs, now underway.
Bankers and analysts said most of the contenders are former managing directors of nationalised banks, whose performance was not up to the mark when they were in office.
"Have they possessed any magic wands to run the banks commercially?" a banker asked.
Others are optimistic about their potential role in the two banks, saying that the competitive pay package will entice them to perform better.
But they have conceded that unless the government ensures professionalism in the boards of the two banks and allows them to deliver services "independently", things are "unlikely to change."
However, the Finance Ministry is on the lookout for a chief executive officer (CEO) of Agrani Bank and has issued a circular in this connection.
The top post at Agrani, also a nationalised commercial bank, fell vacant on September 30 when Abu Naser Bukhtear's contractual appointment expired.
Sources said although there was a provision of service extension in the contract, the Finance Ministry turned down Bukhtear's plea, citing his failure to rein in the non-performing loans with Agrani Bank.
In a recent interview with the FE, Bukhtear, who was appointed by the global consultancy firm Pricewater House Coopers, however defended his leadership role in the bank for the last three years, saying the bank was able to generate considerable profits during his tenure.
In another development, Bangladesh Bank has forwarded names of two persons for the post of deputy governor to Chief Adviser Fakhruddin Ahmed for his approval.
Banking sector insiders said the appointment of managing directors at Sonali, Janata and Agrani would help infuse new momentum into the corporatisation process of NCBs, still caught in a bureaucratic tangle.
The three NCBs have already missed deadlines to finalise the process that could ensure their operations as public limited companies (PLCs). The first "non-binding" timeline elapsed on June 30, 2007 and the latest one on August 31.
If corporatised, it could pave the way for the banks' greater autonomy and allow the central bank to monitor their activities more intensively.
Already, Sonali, Janata and Agrani have obtained separate licences from the Registrar of Joint Stock Companies and Firms to operate as PLCs.
The winds of reform have been sweeping through Bangladesh's banking system since 2004, when the World Bank lent a substantial amount of money to restructure the NCBs.
With a US$ 257.63 million loan from the global lender, the government has started to overhaul the country's financial sector, characterised by inefficiency and corruption.
The World Bank pushed the then BNP-led coalition government to privatise four NCBs to rescue them from perennial losses, and the government agreed on the proposal on condition that Sonali Bank, still the largest commercial lender, would not be privatised.
The government is ready to name chief executives for Sonali and Janata banks soon, ending the battle for securing the top posts of the two state-run entities.
"We've almost finalised selection of two persons to head Sonali and Janata," a source at the Finance Ministry said.
The source, however, declined to reveal the names, fearing that the disclosure could trigger counter-lobbying from the contenders who would lose the battle for the top jobs.
A total of 10 persons, mostly former heads of nationalised commercial banks (NCBs), applied for the top jobs and, of them, nine applicants appeared before the interview board, Finance Ministry sources said.
The sources also said the ministry has already forwarded the names of the two persons to the World Bank for its backing.
"If the World Bank gives its clearance, we'll issue joining letters in favour of the selected persons after Eid vacation," a source disclosed.
The fray for winning the top posts at Sonali and Janata has generated curiosity and interests in the country's banking sector, particularly against the backdrop of the process of corporatisation of NCBs, now underway.
Bankers and analysts said most of the contenders are former managing directors of nationalised banks, whose performance was not up to the mark when they were in office.
"Have they possessed any magic wands to run the banks commercially?" a banker asked.
Others are optimistic about their potential role in the two banks, saying that the competitive pay package will entice them to perform better.
But they have conceded that unless the government ensures professionalism in the boards of the two banks and allows them to deliver services "independently", things are "unlikely to change."
However, the Finance Ministry is on the lookout for a chief executive officer (CEO) of Agrani Bank and has issued a circular in this connection.
The top post at Agrani, also a nationalised commercial bank, fell vacant on September 30 when Abu Naser Bukhtear's contractual appointment expired.
Sources said although there was a provision of service extension in the contract, the Finance Ministry turned down Bukhtear's plea, citing his failure to rein in the non-performing loans with Agrani Bank.
In a recent interview with the FE, Bukhtear, who was appointed by the global consultancy firm Pricewater House Coopers, however defended his leadership role in the bank for the last three years, saying the bank was able to generate considerable profits during his tenure.
In another development, Bangladesh Bank has forwarded names of two persons for the post of deputy governor to Chief Adviser Fakhruddin Ahmed for his approval.
Banking sector insiders said the appointment of managing directors at Sonali, Janata and Agrani would help infuse new momentum into the corporatisation process of NCBs, still caught in a bureaucratic tangle.
The three NCBs have already missed deadlines to finalise the process that could ensure their operations as public limited companies (PLCs). The first "non-binding" timeline elapsed on June 30, 2007 and the latest one on August 31.
If corporatised, it could pave the way for the banks' greater autonomy and allow the central bank to monitor their activities more intensively.
Already, Sonali, Janata and Agrani have obtained separate licences from the Registrar of Joint Stock Companies and Firms to operate as PLCs.
The winds of reform have been sweeping through Bangladesh's banking system since 2004, when the World Bank lent a substantial amount of money to restructure the NCBs.
With a US$ 257.63 million loan from the global lender, the government has started to overhaul the country's financial sector, characterised by inefficiency and corruption.
The World Bank pushed the then BNP-led coalition government to privatise four NCBs to rescue them from perennial losses, and the government agreed on the proposal on condition that Sonali Bank, still the largest commercial lender, would not be privatised.