March 29, 2024, 7:03 pm


FT online

Published:
2019-02-19 21:51:40 BdST

Mustafa Kamal not worried about increasing number of banks


Finance Minister AHM Mustafa Kamal has said that the number of new banks in the offing is not worrying him, provided they abide by the rules and regulations set by Bangladesh Bank.

He said this to reporters before entering a meeting of the cabinet committee on public purchase at the Secretariat on Monday.

In light of three new banks being issued letters of intent (LoI) from Bangladesh Bank on Sunday, Kamal said the central bank and the authorities concerned have approved the new banks on the basis of detailed analysis. The banks are Bengal Commercial Bank, People's Bank and Citizen Bank.

“However, in order to ensure proper management of the banks, more necessary conditions will be imposed from now on,” he added.

In response to a question on the increase in paid-up capital from Tk400 crore to Tk500 crore, he said individual branches of international banks have more paid capital than 20 Bangladeshi banks combined.

"It has to be seen whether there is a demand for more banks and not ponder over the increasing number of banks," the minister added.

Regarding wilful loan defaulters, he said it has been going on for a significant amount of time, but his ministry is now working to drastically reduce the amount of non-performing loans (NPLs).

"NPLs also increase bank's expenses, forcing them to increase lending rates," the minister said. "We are working to reduce this. A special audit-related initiative will be taken in this regard."

The decision to issue LoIs to the three new banks was taken at a board of directors meeting, held at Bangladesh Bank headquarters in Dhaka on Sunday.

Bangladesh Bank Executive Director Abu Farah Md Naser told reporters after the meeting that the enhanced capital base had been set considering the size of the economy and interests of depositors.

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