The board of directors of the Bangladesh Bank (BB) will discuss today (Tuesday) time extension prayers submitted by two proposed banks, which failed to comply with the letter of intent (LoI) requirements in time, officials said.

"Our board may take final decision in the meeting after discussing the matter," a BB senior official told the FE Monday.

He said the central bank will also submit a status paper on other seven proposed banks in the meeting highlighting their latest situation.

The paper will include ensuring deposit of money for complying with paid-up capital, tax-related issues, and default loan position of the sponsors of the proposed banks, he added.

The BB is now checking the tax-related issues with the National Board of Revenue (NBR) in case of local sponsors to ensure whether the blocked money for maintaining the banks' paid-up capital is taxed or not, according to the BB officials.

"We've sent necessary documents to the Credit Information Bureau (CIB) of the central bank to know about non-performing loan issue of the sponsors of the proposed banks," another BB official said.

Under the existing provisions, the paid-up capital of a new bank will be no less than Tk 4.0 billion, and sponsors of the non-resident Bangladeshi (NRB) banks will deposit their paid-up capital in foreign currency.

As part of the scrutiny, the central bank is now collecting information on blocked money for paid-up capital and default loan of the sponsors from the banks concerned and the CIB.

Seven proposed commercial banks earlier applied to the central bank for licences to start their business after complying with the requirements as per the LoI.

The proposed banks, which have submitted documents to the BB, are - Union Bank Limited, Farmers Bank Limited, Meghna Bank Limited, Midland Bank Limited, South Bangla Agriculture and Commerce Bank Limited, NRB Commercial Bank Limited and NRB Bank Limited.

News: The Daily Financial Express/Bangladesh/27-Nov-12