'They will have get final approval after full filling all the conditions by the sponsors and also have to submit business plan to the central bank'

Bangladesh Bank has decided to allow two more financial institutions as per the recommendations made by the finance ministry.

The two likely institutions are CAPM Venture Capital and Finance Limited owned by Mahmud Hussain, and Meridian Finance and Investment Limited, the prime promoter of which is Kazi Aminul Islam.

The board of directors of the central bank made the decision at a meeting held yesterday, deputy governor SK Sur Chowdhury told the reporters after the meeting.

At present 31 financial institutions are actively conducting business activities in the country.

Nine banks and one financial institution were approved in the last tenure of Awami League-led government.

There had been an allegation that those approvals were given under political consideration.

Besides, one more financial institution got the approval from the central bank as soon as the present Awami League-led government was re-elected in January 5 polls.

The paid-up capital of the two new financial institutions will be Tk100 crore. Sponsors have to pay the tax on the capital investment. Moreover, they have to fulfill 30 more conditions as per the rules.

"The two financial institutions have just got initial approval. They will have get final approval after full filling all the conditions by the sponsors and also have to submit business plan to the central bank," said SK Sur Chowdhury.

CAPM Venture Capital and Finance Limited will work for buying machineries and also for business development.

Meridian Finance and Investment Limited will work for infrastructure and private sector development.

“If the two new companies come into operation with innovative activities, then it is alright. But if they got the approval for the same ground as like as the existing FIs’, they have to face stiff competition’’, said former central bank governor Dr Salehuddin Ahmed.

News:Dhaka Tribune/06-Mar-2014