• Tuesday, Jun 22, 2021
  • Last Update : 04:19 am

Citizens Bank gets the final nod from Bangladesh Bank

  • Published at 11:59 pm December 7th, 2020
Bangladesh Bank
Mehedi Hasan/Dhaka Tribune

The board awarded the licence to the proposed bank as its sponsors fulfilled all regulatory requirements

The Bangladesh Bank on Monday gave its final approval to Citizens Bank, bringing the total number of scheduled banks in the country to 61. 

The board awarded the licence to the proposed bank as its sponsors fulfilled all regulatory requirements, said Md. Serajul Islam, spokesperson of the BB.

While Citizen Bank got the final approval, the bank would have to raise its paid-up capital to Tk500 crore before it kicks off operations, said a high official of the BB requesting anonymity.

Jahanara Huq, the mother of Law Minister Anisul Huq, was the chairman of the proposed bank but after her death, the BB on October approved Towfika Aftab as the chairman of the bank. Aftab was a director of the proposed bank.  

Then last month, Citizen Bank’s proposed managing director Saidul Hasan passed away from COVID-19. 

Before joining the proposed Citizen Bank, Hasan was the deputy MD of Dutch Bangla Bank.

The bank's new MD is Mohammad Masoom, a former additional managing director of Midland Bank.

“We would focus on SME lending,” he told Dhaka Tribune yesterday.

The bank’s board of directors are well-educated and dynamic, he said.

“This would bea big strength for me in leading the bank,” he added.

In February, last year, the central bank decided to issue letters of intent (LoI) to three banks: Bengal Commercial Bank, People's Bank and Citizen Bank.

In February this year, the central bank gave the final nod to Bengal Commercial Bank, which has been initiated by Bengal Group of Industries, a local manufacturer of plastic products. 

The group’s vice-chairman Jashim Uddin will act as the chairman of the bank.

The central bank may award licences to the proposed People's Bank in the next board meeting, the BB official said.

There is no logic to approving more banks, said AB Mirza Azizul Islam, a former finance adviser to a caretaker government.

“The number of banks is already high -- we should think of laws to force mergers for the existing ones, rather than establishing new banks,” he added.

The number of banks is high given the size of the economy and the excess number of banks will make them grocery stores soon, said Khondkar Ibrahim Khaled, a former deputy governor of the BB.

As of September, 11 banks have failed to meet the minimum capital requirement of the central bank. 

The banks faced a combined capital shortfall of Tk 19,296 crore, according to the latest data from BB.

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