Sources: Muhith wants privatisation of state banks

The state-run banks, which continue to make losses, except Sonali Bank should be privatised as early as possible, Finance Minister AMA Muhith told a meeting as quoted by the officials concerned. Muhith held a meeting with managing directors of seven state-owned banks on their capital shortfalls on Sunday. Bangladesh Bank Governor Fazle Kabir and Bank Division Secretary Md Enusur Rahman also attended the meeting at the Finance Division auditorium. At the meeting, Muhith referred to a recommendation of former Bangladesh Bank Governor Mohammed Farashuddin to privatise the state-owned banks which continue to make losses. Last year at a pre-budget meeting, Farashuddin urged the government to privatise the loss-making state-run banks as soon as possible. Finance minister said the condition of all the state-run banks is “poor” in terms of capital or provision shortfall. He said: “The way-out from such situation is that the government will need to privatise the state-run commercial banks that continue to count losses.” “At least one bank needs to be privatised a year to stop the economy bleeding,” Muhith said. In 2016,  six state-run banks logged operating profits of Tk2,010 crore, down 37% from a year ago. But after provisioning and tax payments, the state banks registered a net loss of Tk511 crore for the year, which was Tk125 crore in 2015. Two other state-owned specialised banks – Krishi Bank and Rajshahi Krishi Unnayan Bank – counted Tk418 crore in losses last year, against Tk167 crore in 2015.