The LGRD ministry has asked Bangladesh Bank not to oppose the establishment of Palli Sanchay Bank (PSB), a bank proposed to encourage rural savings.
Rural Development and Cooperatives Division of the ministry recently wrote a letter to the central bank governor in this regard, said officials.
Bangladesh Bank is opposed to PSB as “such specialised banks already in operation have not succeeded in their objectives.”
Finance Division is also against the PSB since the country already has some of such banks.
The letter was signed by Patit Pabon Devnath, Assistant Secretary to the Rural Development and Cooperatives Division, which called for no-objection from the central bank to set up the PSB.
Today, Banking Division has called a meeting on the issue at its office in Dhaka.
Officials of Rural Development and Cooperatives Division will also be present at the meeting to be presided over by the Finance Minister AMA Muhith, said official sources.
Bangladesh Bank and Banking Division are suggesting the establishment of a microcredit institution instead of launching Palli Sanchay Bank.
The rural division letter said the future beneficiaries of PSB have already expressed grievance over the central bank’s decision.
It said the people will soon “demonstrate against the central bank” for allowing the establishment of PSB.
Cooperatives Division said principal secretary Sheikh Md Wahid Uz-Zaman talked to the central bank governor over phone on the issue.
The letter read cooperatives division has already taken preparation to turn “One House One Farm Project” to the PSB as the number of projects’ beneficiaries has exceeded 1m.
At an inter-ministerial meeting last month, Bangladesh Bank and Banking Division issued their oppositions to the setting up of the PSB.
Officials of Rural Development and Cooperatives Division were also present at the meeting.
The Cooperatives Division already prepared a draft Palli Sanchay Bank Act 2013.
But the central bank and the banking division officials ruled out the possibility of any such law to be made during the tenure of the present government.
The Cooperatives Division is however adamant at their stance to set up a specialised bank.
Bangladesh Bank said such specialised banks have not been successful in Bangladesh and the PSB would also not be viable.
Last month, Prime Minister Sheikh Hasina announced that the government will establish Palli Sanchay Bank to improve rural economy encouraging the people to rural savings.
She was inaugurating the digital banking service for the rural poor people. The function also distributed national awards on “One House One Farm” project.
“We’ll have to convince the Banking Division,” she said.
Sheikh Hasina added that the “One House One Farm Project” was showing a new path towards poverty alleviation.