The stringent regulations set for issuing new banks' licences are likely to be softened as the Prime Minister's Office (PMO) is pursuing the issue amid 'pressure from influential quarters' willing to become bank owners, official sources have said.
Prime Minister Sheikh Hasina has sought clarification from Bangladesh Bank (BB) about the rationality of stringent regulations for new banks. The Ministry of Finance (MoF) in a letter issued last week to BB asked the central bank to let the ministry inform about its reply to the premier's queries, a BB official said.
However, the BB Governor said any change in the regulations would require approval from the Board of Directors of BB.
"The MoF referring to the query of the Prime Minister has sought to know about some issues relating to the regulations on new banks and the implications," Mr Atiur told the FE.
"We will give explanation on the rationality of the new criteria for new banks," he added.
He, however, said he was not under 'any pressure' to bring any changes to the regulations. Any change in the regulations has to be approved by the meeting of the board of directors of BB, the Governor said.
Sources at the PMO said, requirements of minimum paid-up capital criteria, white money and borrowed money issues included in the regulations are expected to be softened as the aspiring bank owners, also close to the incumbent government, have been pestering Sheikh Hasina for bringing about changes in this connection.
"At least two to three stringent conditions are set to be changed as far as issuing new bank licences is concerned," a senior bureaucrat at the PMO said.
According to the regulations for new banks, the paid-up capital of the bank shall not be less than Taka 4.0 billion, and the amount has to be provided by sponsor-directors of the proposed bank. Sponsors' contribution to the equity capital of the proposed bank will be required to be out of the net worth declared to the tax authorities in form IT 10B and the contribution out of borrowings from bank or non-bank financial institutions shall not be acceptable.
The previous regulations for issuing bank licences had no stringent criteria of declaring money in tax return, while no bar was there in borrowing money from banks or financial institutions to contribute sponsor-amount for a new bank, a senior official at the finance ministry said.
The BB Governor said they would include a comparison of the current and previous regulations along with their clarification to PMO and MoF.
The last time new bank licences issued were in 1999 and 2000 . Currently, the country has 47 scheduled banks.
Finance Minister AMA Muhith earlier said the government would issue new bank licences on 'political considerations' which had sparked criticism.
The BB officials hinted that a total of six to eight licences for new banks are likely to be issued this time.
Source: thefinancialexpress-bd.com
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