The Bangladesh Bank on Sunday declared newly-licenced Bengal Commercial Bank as a scheduled bank, taking the total number of scheduled banks in the country to 60.
The central bank inducted it as a scheduled bank after the BB board, led by its governor Fazle Kabir, agreed to issue the final approval to Bengal Commercial Bank on February 9.
The approval was issued despite criticism from banking experts against allowing new banks to set up amid a series of scams and irregularities that has taken place in the sector in the last several years.
In February 2019, the BB board issued the ‘letter of intents’ to two banks — Bengal Commercial Bank and Citizens Bank — based on proposals made by the government, within a few months of issuing its final approval to Bangladesh Police’s Community Bank of Bangladesh.
Bengal Group of Industries initiated the move to set up Bengal Commercial Bank.
Bengal Group chairman and Awami League lawmaker Morshed Alam’s younger brother Jashim Uddin was named as chairman of the proposed bank.
Apart from Bengal and Citizen, the BB was also scrutinising proposals from the Bangladesh Navy to award licence to Maritime Bank.
The approval process for yet another bank, People’s Bank, was stalled due to money laundering allegations brought against the proposed bank’s chairman, Abul Kashem.
In 2013, the ruling party-backed businesses were awarded nine banking licences at the fag-end of the first term of the AL-led government’s third consecutive term.
Even though former finance minister AMA Muhith on several occasions had admitted that the number of banks in the country was high, he endorsed the proposals for four fresh banks at the very end of his tenure.
At least two banks approved in 2013 are struggling to survive amid allegations of massive irregularities.
Of them, Farmers Bank, now struggling to repay the depositors’ money, was renamed as Padma Bank in January this year to restore its image tarnished by the disclosure of a series of irregularities through a Bangladesh Bank investigation.
Want stories like this in your inbox?
Sign up to exclusive daily email
More Stories from Banking