Bangladesh Bank is scheduled to complete today the process of distributing letters of intent (LOIs) to the newly approved six conventional private banks and three specialised banks for non-resident Bangladeshis.

BB sources said the central has formulated the LOIs putting 30 conditions to be fulfilled by the entrepreneurs to receive an original lice-nce within the next six months to start operation of the new banks.

Chairman of one of the banks which is an NRB bank said on Tuesday that he had already received the LOI to take the next steps to secure the licence.

If the authorities of a new bank fail to receive original licence by meeting all the 30 conditions, the licence will be cancelled, said BB deputy governor SK Sur Chowdhury.

In default, he said, the bank authorities will have to apply to the central bank seeking extension of time for beginning operations. The chairman or board members of the bank/s may be changed at that time, Sur Chowdhury added.

Notwithstanding controversies surrounding permission for more new banks, the central bank, at its board meeting on 8 April, approved six commercial banks after endorsing three Non-Resident Bangladeshi (NRB) banks on 4 April.

The banks are Awami League leader and former state minister Muhiuddin Khan Alamgir’s Farmers’ Bank, Awami League lawmaker Barrister Fazle Noor Tapash’s Modhumati Bank, Meghna Bank of HN Ashikur Rahman and Nasrul Hamid MP, Jatiya Party Chairman HM Ershad’s Union Bank, former managing director of Karmasangsthan Bank M Manirujjaman Khondoker’s Midland Bank and Professor Abdul Mannan Chowdhury’s South Bangla Agriculture and Commerce Bank.

The sponsors of the NRB banks that got BB nod are US expatriates Farashat Ali and Nizam Chowdhury, and UK expatriate Iqbal Ahmed.

The new banks will be required to open branches at a ratio of 1:1 in rural and urban areas while they will have to distribute 5 percent of total credit into agriculture sector and spend 10 percent of net profit in activities relating to corporate social responsibility (CSR).

Each managing board should be comprised of a maximum of 13 members.

The entrepreneurs will not be allowed to hand over shares within three years of functioning and without prior permission of the central bank.

The Daily Sun/Bangladesh/ 18th April 2012