Two out of nine new banks have failed to submit their supporting documents with their applications for licences within deadline which passed yesterday, Bangladesh Bank officials said.

The two banks, NRB Global Bank and Madhumati Bank, have sought for extension of six months to meet BB's regulations for setting up new banks.

“The central bank will decide on the time extension at its board meeting,” a BB official said yesterday.

“We need more time to arrange the money required as paid-up capital. We hope to get the extension,” Nizam Chowdhury, proposed chairman of the NRB Global Bank, said yesterday.

Chowdhury said initially he thought Tk 200 crore would be needed as paid-up capital, but later found the figure was Tk 400 crore.

Sheikh Fazle Noor Taposh MP who is a sponsor of the Madhumati Bank could not be reached for comments.

In April, the BB gave the go-ahead to nine new private banks, all linked with either lawmakers of the ruling Awami League and Jatiya Party or influential persons, despite opposition from different quarters.

The BB issued a 'letter of intent' for the new banks on April 17 and asked them to submit all supporting documents within a six-month timeframe.

Sponsors of the banks will also have to ensure they have arranged minimum Tk 400 crore needed as paid-up capital.

The minimum shareholding stake of each sponsor shall be Tk 1 crore, with the maximum being 10 percent or Tk 40 crore of the Tk 400 crore paid-up capital.

The seven banks which managed to meet the deadline are: South Bangla Agriculture and Commerce Bank, Midland Bank, Farmers' Bank, Union Bank, Meghna Bank, NRB Commerce Bank and NRB Limited.

“We'll now scrutinise the applications, including the eligibility of the sponsors and sources of their money,” said the BB official. Their credit reports, too, will be examined, he said.

Upon receiving the formal licences, the banks will have to issue public shares within three years from the date of commencement, with the public issues at least equal to the sponsors' share amount.

At present, 47 public, private and foreign banks are in operation in the country, in addition to the 29 non-bank financial institutions.

News: The Daily Star/Bangladesh/17th-Oct-12