Keeping Deposits Of Govt Entities
BB eases rule for new ‘politically licensed’ banks
Bangladesh Bank has lifted a bar on private commercial banks that are less than five years in operation to keep deposit of all government and autonomous organisations in a bid to channel funds to the politically licensed new banks. The BB in a circular on Tuesday said all government, semi-government, autonomous and semi-autonomous organisations would be able to keep up to 25 per cent of their deposits with all private commercial banks.
It also said all private commercial banks would be able to keep 20 per cent of annual development programme’s fund of autonomous and semi-autonomous organisations.
As per the previous regulation, the government,
semi-government, autonomous and semi-autonomous organisations had earlier kept the fund and their own deposit in only the PCBs that had operated their businesses for at least five years, A BB official told New Age.
The regulations have been changed so that the nine politically backed new banks could hold the government fund, he said.
The central bank issued the circular letter to managing directors and chief executive officers of all scheduled banks after the bank and financial institution division of the finance ministry made an announcement on September 24.
The BB official said that the central bank’s move to give licences to these new banks in late 2011 had drawn huge criticism.
Economists were worried that the new banks would plunge in liquidity crisis as the existing number of banks was enough considering the economic volume of the country, he said.
The government is now trying to provide liquidity support to the nine new banks by changing the regulations, he said.
-With New Age input
