Three new banks have got the go-ahead for starting commercial operations by the central bank.
The Bangladesh Bank gave its green light to the banks during its board meeting on Sunday (Feb 17).
Letters of intent (LoI) have been issued for Bengal Commercial Bank, People’s Bank and Citizen Bank, sources confirmed Bangla Tribune adding that the banks will require a paid up capital of Tk 5 billion to start operations.
A total of 58 government and private commercial banks and 34 non-bank financial institutions are operating currently.
“The central bank’s board gave its initial clearance for Bengal Commercial Bank earlier, which was finalized on Sunday,” a Bangladesh Bank executive director told Bangla Tribune on condition of anonymity.
People’s Bank and Citizen got the final approval the after fulfilling the conditions given by the central bank’s board during the last meeting, he added.
Jasim Uddin, the younger brother of Bengal Group Chairman Morshed Alam MP of the Awami League, is the proposed chairman of the bank. Jasim serves as the vice chairman of the business group.
Law Minister Anisul Huq’s mother Jahanara Huq’s name has been proposed as the head of Citizen Bank’s Board.
MA Quasem, an expatriate Awami League leader living in the US, is the proposed chairman of the People’s Bank
The central bank decision comes even after bankers and economists have said time and again that there were too many banks in Bangladesh, which former finance minister AMA Muhith has also agreed on several occasions.

In October last year, Bangladesh Police Welfare Trust’s Community Bank was cleared by the central bank.

The Awami League government, which started its third straight term in early January, has cleared 10 private banks in as many years in power.


In 2012, the government gave licence to nine banks, which former finance minister Muhith later admitted were cleared on political considerations.
Later, the government cleared the Border Guard Bangladesh’s Simanto Bank.
The banking sector has been in discussions for huge loan scams in past few years. The banks cleared in 2012 are also struggling with irregularities and liquidity crisis.