Muhith, admitting no of banks high, says 4 more in offing

Finance minister AMA Muhith on Wednesday said the government was in the process of giving approval to four new private banks, hours after admitting that the number of banks and non-bank financial institutions in the country was high.
He disclosed the developments regarding the new banks in parliament while responding to a query made by Jatiya Samajtantrik Dal lawmaker (Panchagarh-1) Nazmul Haq Prodhan during a question-answer session.
The finance minister’s admission that the number of banks and NBFIs in the country was high came while he was answering a question from journalists after a meeting of the cabinet committee on public purchase at the secretariat in the capital.
He noted that the number should be restricted.
This was first time the finance minister made the admission of high number of banks although he used to say that more banks were needed to increase outreach by them in the rural areas.
Muhith reiterated that merger and consolidation could be ways to reduce pressure from the overcrowded bank and financial sector.
There are 57 scheduled banks and 33 NBFIs in the country.
Muhith told parliament that the government approved 49 private banks till September 30, 2018.
Of the banks, 40 are local private banks and the rest nine are foreign commercial banks, he added.
Of the private scheduled banks, the present government provided licence for establishment of nine banks in 2009 on political consideration despite opposition by the central bank and other quarters.
One of the new banks — Farmers Bank — has been facing severe liquidity crisis because of loan scams.
The government was forced to arrange bailout fund worth more than Tk 700 crore from the state-owned commercial banks for scam-hit Farmers Bank.
Besides, the amount of non-performing loans in the banking sector has been increasing due to wilful loan defaulters.
Experts have been asking for establishing a banking commission to tackle the banking sector woes.
Muhith pledged to establish a commission on the banking sector on a number of occasions in the past, but always stepped back from his commitments.
In August this year, the finance minister announced that he would make recommendations to carry out a reform in the banking sector by the next government.
On Wednesday, Muhith said he would focus not only on the banks but also shed light on the NBFIs in his recommendations.
Earlier, the cabinet committee on public purchase approved a proposal to award the deal of water treatment plant worth Tk 2,721 crore in Rajshahi to a Chinese company on government-to-government basis, said Cabinet Division additional secretary Nasima Begum.
She also said Hong Kong Engineering was awarded the contract of dredging at Mongla Sea Port at a cost of Tk 592.51 crore and Nippon of Japan was appointed to look after the development of water bodies at a cost of Tk 104 crore to be funded by Japan International Cooperation Agency.
Risk and Emergency Management of Australia was awarded the consultancy work for skill development of rescue workers of earthquake. World Bank is financing the consultancy deal worth Tk 84.53 crore.
Khulna Shipyard won a river protection work of 34.9 kilometres directly quoting Tk 454.35 crore.
Nasima said the committee asked the Rural Electrification Board to purchase 40 per cent of transformers with international tenders for implementation of an ongoing project in absence of response from local suppliers.
She also said the committee withdrew a previous decision to award a contract to Summit Communications and Fibre At Home for installation of infrastructures and providing internet service at 600 unions since the government decided to implement the project with a public-private-partnership initiative.

Source: New Age.

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