Encouraged by Bangladesh Bank (BB) and largely untapped potentials, country’s commercial banks this year will focus more on rural areas to open their branches, bringing in a major and first time switchover in expanding their businesses. Some 19 commercial banks this year got the central bank’s nod to open 168 branches across the country, of which 85 will be in the countryside, leaving lower number of 83 for cities and towns, according to BB.

“More branches in rural areas will offer banking services to a large number of people who have been deprived of institutional financial services for years,” Governor Dr Atirur Rahman told BSS.

The governor, who has been driving the central bank in many ways towards achieving inclusive growth, believes expansion of rural banking will propel growth by bringing in a huge number of people under banking and financial services.

“The rural banking will also help control inflation with injecting more money in the banking system from the people who otherwise invest or keep their savings in mostly non-productive sectors, a major cause of inflation,” he said.

Last December the central bank decided that banks should open equal number of branches in rural and urban areas, which was four urban branches for opening one in villages as per earlier directive of BB, issued in 2006.

“We have changed the ratio of rural and urban branches to make banks going rural instead of concentrating their business and services in cities and towns,” Dr Rahman said.

Defining the rural and urban areas, BB Executive Director for the Banking Regulation and Policy Department Naushad Ali Chowdhury said the areas under city corporations and municipalities are considered as urban areas. So, he said, the branches outside city corporations and municipalities will be treated as rural branches.

Prime Bank got permission for opening the highest 12 branches for 2012 after the Bank got top position in CAMELS rating. The central bank offered the banks open new branches as per their CAMALS rating. Some other performances were also considered for the banks that got three and lower rating under CAMELS.

CAMELS is an international bank-rating system where bank supervisory authorities rate institutions according to six factors including Capital adequacy, Asset quality, Management quality, Earnings, Liquidity and Sensitivity to market risk.

Eleven banks got permission for opening 10 branches each. The banks are Pubali Bank, Islami Bank, National Bank, UCBL, Southeast Bank, Dutch-Bangla Bank, Al- Arafa Islami Bank, Mercantile Bank, Premier Bank, Mutual Trust Bank and Bank Asia.

The Daily Sun/Bangladesh/ 20th March 2012