BB terms the move unwise
The government has taken an initiative to turn the state-owned House Building Finance Corporation into a specialised bank on ‘political consideration,’ officials said on Wednesday.
But the move has received cold response from the Bangladesh Bank that is against turning the HBFC into a housing bank because of excessive presence of banks in the country.
Established in 1952, the HBFC has been providing financial assistance in the housing sector. Its authorised capital is Tk 110 crore and during 2010-11 the total paid-up capital stood at Tk 110 crore. Its balance stood at Tk 2,583.34 crore as on 30th June, 2012.
Finance ministry officials alleged that HBFC’s managing director Nurul Alam Talukder
has been lobbying with the government to turn it into a banking entity to overcome its ‘financial shortage.’
The bank and financial institution division under the ministry of finance has recently asked for opinion of BB as to how the HBFC could be turned into a bank.
BB in its opinion said there are 47 scheduled banks in the country. The number will go up to 57 soon as the present government has given licences for establishment of seven more banks, it pointed out.
It observed that considering the size of the economy and the number of banks, BB in its letter to the bank and financial institution division said ‘it will not be wise’ to set up Bangladesh Housing Bank.
The country’s banking sector will face an unhealthy competition which might weaken the banking sector, a most vital organ of the economy, further, said the BB.
A series of financial scams, including swindling of Tk 3,600 crore by Hallmark Group from the state-owned Sonali Bank and misappropriation of funds from state-owned BASIC bank, now under investigation of the Anti-Corruption Commission, has rattled the county’s banking sector.
BB in its opinion observed that HBFC was running without any licence which is a violation of the law enacted in 1993 to deal with the financial entities. It suggested that the HBFC should obtain licence under the law.
BB has also suggested that state-owned the investment corporation of Bangladesh which mainly deals with investment in share market should also obtain licence under the financial entities law of 1993.
It pointed out that BB could monitor their activities under the law.
-With New Age input
