Launching of commercial banking
BB, Probashi Kallyan Bank in disagreement
Bangladesh Bank and the state-run Probashi Kallyan Bank have taken opposite stance on the latter’s proposal to allow it to go for commercial banking in limited scale.
The PKB, a bank set up for expatriates’ welfare, has made a proposal that the central bank should allow it to launch limited-scale commercial activities in one of its branch for the time being and open an exchange house.
The bank authorities raised the issue at a meeting at the finance ministry chaired by the banking division secretary M Aslam Alam on December 27.
But, Bangladesh Bank representatives at the meeting said that as per the banking company act there was no scope for a non-scheduled bank like PKB to go for commercial banking, said finance ministry officials.
PKB officials, however, said as per the Section 4(6) of the Probashi Kallyan Bank Act, 2010, the bank should be allowed to perform commercial banking.
The meeting decided that Bangladesh Bank would give specific opinions on allowing the PKB to go for commercial banking as per its need while the PKB would collect the info on rules and regulations on commercial banking from the BB and take necessary steps accordingly.
A senior BB official told New Age on Thursday that they had yet to send the opinions to the finance ministry, but as per the 31(1) section of the Bank Company Act, 1991, no bank is allowed to operate banking business without taking licence from the central bank.
‘If the PKB wants to go for banking business it should take licence by depositing necessary funds,’ he said.
When asked about the PKB proposal to allow it go for commercial banking, BB deputy governor SK Sur Chowdhury told New Age that the central bank had already cleared its position in last month’s meeting at the finance ministry.
He, however, would not say about the opinions the BB would send to the finance ministry.
PKB chairman Zafar Ahmed Khan, who is also the expatriate welfare secretary, told New Age that they expected that the BB would allow the PKB to operate commercial banking in limited scale taking into consideration of the act under which the bank is set up and the welfare of the expatriates.
He said that they had requested prime minister Sheikh Hasina to allow them to go for commercial banking as the bank was set up because of her political commitment and the PM sent the matter to the finance ministry.
‘But the central bank is dilly-dallying to provide approval for a commercial branch and opening of an exchange house of our bank.’
The PKB will be free from the existing liquidity crisis if it could operate the commercial banking, he said.
As per the minutes of the December 27 meeting at the finance ministry, PKB managing director CM Koyes Sami in the meeting said that the bank had been established to provide necessary facility to the expatriate workers so that they could send remittances more to the country.
He said that the PKB would be able to attain its desire success if it acquired an approval to open branch in a bid to operate commercial banking and to open exchange house abroad to earn foreign remittance.
BB representatives said the bank could go for agreement with foreign exchange houses like MoneyGram and Western Union to launch activities like distributing remittances.
PKB officials, however, said the expatriates would be deprived of fair rate of foreign exchanges if they had to link with foreign exchange houses.
Courtesy of New Age
