Operational responsibilities of NCBs handed over to new board of directors
Friday, 16 November 2007
FE Report
Operational responsibilities of three nationalised commercial banks (NCBs) have been handed over to their newly appointed boards of directors to run the banks independently under corporate arrangement.
Three separate agreements to this effect were signed Thursday between the government and boards of directors of the three NCBs at the conference room of finance ministry at the Secretariat.
The NCBs will start its journey as public limited companies (PLCs) after the issuance of an official gazette notification in accordance with the Banking Companies Act of 1994.
Chairmen of Sonali, Janata and Agrani banks Ali Imam Majumder, Sohel Ahmed and Siddiqur Rahman Chowdhury respectively signed the agreements on behalf of their respective boards while Deputy Secretary of Finance Ministry Kamrun Nahar Ahmed signed the deal for the government.
Finance Adviser AB Mirza Azizul Islam, Finance Secretary Mohammad Tareque, managing directors of Sonali, Janata and Agrani banks and other government officials were present at the signing ceremony.
Speaking on the occasion, the finance adviser said with the handing over of the operational responsibility of the NCBs to their boards of directors, the government has accomplished necessary formalities to run the NCBs under corporate structure.
Now, it is the responsibility of the bank's boards of directors to make them operationally sound through enhancing their management efficiency, he mentioned.
Terming the signing of such agreement a significant event, the adviser said it would provide total autonomy to the new management of the NCBs.
He, however, said the NCBs could not function properly in the past due to political interference.
The finance adviser also expressed the hope that the corporatisation of the NCBs would help reduce such political intervention.
He also advised the managements of the NCBs to reduce the volume of classified loans that happened in the past due to the political interference.
The adviser, however, suggested that the new NCB authorities should ensure a balance between their deposits and loan portfolios to make their banks operationally sound.
Stressing the need for reduction of interest rate on credit, he said higher rate of interest pushes up the production costs.
The banks should give more emphasis on enhancement of their services instead of higher profit margin in order regain the confidence of their clients, he observed.
The council of advisers of the interim government at its October 31 meeting gave approval to the handing over of the bank's operational responsibilities to their boards of directors.
Earlier, the three state-run banks -- Sonali, Janata and Agrani - had obtained separate licences from the Registrar of Joint Stock Companies and Firms to operate as Public Limited Companies (PLCs).
Besides, the value of each share of the three NCBs has already been fixed at Tk 100.
Operational responsibilities of three nationalised commercial banks (NCBs) have been handed over to their newly appointed boards of directors to run the banks independently under corporate arrangement.
Three separate agreements to this effect were signed Thursday between the government and boards of directors of the three NCBs at the conference room of finance ministry at the Secretariat.
The NCBs will start its journey as public limited companies (PLCs) after the issuance of an official gazette notification in accordance with the Banking Companies Act of 1994.
Chairmen of Sonali, Janata and Agrani banks Ali Imam Majumder, Sohel Ahmed and Siddiqur Rahman Chowdhury respectively signed the agreements on behalf of their respective boards while Deputy Secretary of Finance Ministry Kamrun Nahar Ahmed signed the deal for the government.
Finance Adviser AB Mirza Azizul Islam, Finance Secretary Mohammad Tareque, managing directors of Sonali, Janata and Agrani banks and other government officials were present at the signing ceremony.
Speaking on the occasion, the finance adviser said with the handing over of the operational responsibility of the NCBs to their boards of directors, the government has accomplished necessary formalities to run the NCBs under corporate structure.
Now, it is the responsibility of the bank's boards of directors to make them operationally sound through enhancing their management efficiency, he mentioned.
Terming the signing of such agreement a significant event, the adviser said it would provide total autonomy to the new management of the NCBs.
He, however, said the NCBs could not function properly in the past due to political interference.
The finance adviser also expressed the hope that the corporatisation of the NCBs would help reduce such political intervention.
He also advised the managements of the NCBs to reduce the volume of classified loans that happened in the past due to the political interference.
The adviser, however, suggested that the new NCB authorities should ensure a balance between their deposits and loan portfolios to make their banks operationally sound.
Stressing the need for reduction of interest rate on credit, he said higher rate of interest pushes up the production costs.
The banks should give more emphasis on enhancement of their services instead of higher profit margin in order regain the confidence of their clients, he observed.
The council of advisers of the interim government at its October 31 meeting gave approval to the handing over of the bank's operational responsibilities to their boards of directors.
Earlier, the three state-run banks -- Sonali, Janata and Agrani - had obtained separate licences from the Registrar of Joint Stock Companies and Firms to operate as Public Limited Companies (PLCs).
Besides, the value of each share of the three NCBs has already been fixed at Tk 100.