Bangladesh Goverment invites applications for new private banks

Bangladesh Bank yesterday invited applications for setting up of new private banks and published detailed guidelines for establishing banking company.

In a recent meeting of Board of Directors, BB had decided in principle to grant license to new private banks pursuant to section 31 of the Banking Companies Act, 1991.The banking sector regulator took the decision after considering the need and overall strategy congenial to effective monetary and financial sector policy for the country, a BB statement said.Last date of application submission for license is November 30 this year. Applications should be in the prescribed form and prepared according to the instructions provided in the guidelines.According to the set terms and condition, it must be a public limited company incorporated in Bangladesh and initial minimum paid up capital of a new bank shall be Taka 4 billion, provided by sponsors.The Share capital will be formed with ordinary shares only.The minimum shareholding stake of each sponsor shall be Taka 10 million and the maximum shall be 10 percent of the proposed bank’s share capital. This ceiling is applicable to an individual, company or family member, either individually or jointly.Sponsors' contribution to the equity capital of the proposed bank will be required to be out of net worth declared to the Tax authorities in form IT 10B. Contributions borrowed from banks and NBFIs will not be acceptable. Tax return and certificate has to be submitted.Competence, integrity and qualifications of the sponsors of the proposed bank becoming the first directors shall be evaluated.The evaluation process shall include background checks on whether previous activities, including regulatory or judicial judgments, raise doubts concerning their competence, sound judgment, or integrity.The sponsors or directors shall qualify the Fit and Proper Test criteria applicable for the Bank Directors in Bangladesh, the guideline says.Taka one million has been fixed as the non-refundable application processing fee, which will be paid through a bank draft in favour of Bangladesh Bank, attached to the letter of application.For further information about the detailed guidelines, interested people have to log on to official website of the Bangladesh Bank.

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