Defending the central bank’s move to clear new banks, Finance Minister AHM Mustafa Kamal said that it was done on the “basis of a complete analysis”.
His remarks came on Monday (Feb 18) while speaking to the media, a day after three new banks were given the go-ahead by Bangladesh Bank raising the number of banks operating in the country to 62, reports BSS.
“The existing number of banks is not a matter of concern. If the banks run smoothly, provide their services as per the rules and regulations and attain their objectives, then I am not worried about the number of banks,” the state news agency quoted Kamal saying.
Speaking to reports before entering a meeting of the Cabinet Committee on Government Purchase at the Secretariat, he said that the authorities have approved the new banks on the basis of a complete analysis, the report said.
“However, in order to ensure proper management of the banks, more necessary conditions will be imposed from now on,” he was quoted saying.
On Sunday, the Bangladesh Bank’s decided to issue letters of intent (LoIs) to Bengal Commercial Bank, The Citizen Bank and People’s Bank.
After fulfilling all requirements as per the LoI, the three new banks will get final license.
Responding to a query from the media, the finance minister said on Monday that the decision of increasing paid-up capital for the banks to Tk 5 billion from Tk 4 billion is not much as the paid-up capital of a lone branch of many foreign banks is higher than the country’s 20 banks.
He also said the government will arrange special audit in banks for ensuring transparency and to bring down the huge amount of non-performing loans.
The central bank decision to approve new banks came even after bankers and economists have said time and again that there were too many banks in Bangladesh, which Kamal’s predecessor AMA Muhith has also agreed on several occasions.
The Awami League government, which started its third straight term in early January, has cleared 11 private banks in 10 years in power.
In October last year, Bangladesh Police Welfare Trust’s Community Bank was cleared by the central bank.
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.