Bangladesh Bank greenlights Citizen Bank amid pandemic

The central bank has given approval to yet another private commercial bank to start operations amid the economic slowdown caused by the coronavirus pandemic.

Bangladesh Bank gave the go-ahead to Citizen Bank Ltd during a meeting of its board of directors on Monday.

After the meeting, Sirajul Islam, executive director of Bangladesh Bank, said: "The Citizen Bank has been given the final approval upon its meeting all requirements, including having a paid-up capital of Tk 5 billion."

Former deputy governor of Bangladesh Bank Khondkar Ibrahim Khaled has questioned the rationale behind approving a new bank amid the ongoing crisis in the banking sector.

“Now a letter will be officially sent by the central bank to Citizen Bank's authorities to start banking activities in the country,” Sirajul, the national bank’s spokesperson, told bdnews24.com. The bank will be able to start operations in compliance with all the given conditions.”

With the addition of Citizen Bank, the number of operational banks in Bangladesh stands at 61. Of these, nine are state-owned while 42 are run privately along with nine branches of banks which are incorporated abroad.

Bangladesh Bank gave a preliminary approval to Bengal Bank, People's Bank and Citizen Bank on February 17 last year.

Bengal Bank is a concern of Bengal Group, with Jasim Uddin, the younger brother of Bengal Group Chairman Morshed Alam MP of the Awami League, instated as chairman of the bank. The bank is already in operation.

MA Quasem, an expatriate Awami League leader living in the US, is the proposed chairman of the People’s Bank.

But the bank failed to meet the stipulations set by Bangladesh Bank and was, therefore, not given the green light at Monday's board meeting, Sirajul said.

However, Ibrahim Khaled was highly critical of the central bank for giving approval to another new bank amid the epidemic.

"We have repeatedly said that there is no need for any new banks in a country with an economy like Bangladesh. Still, they are being given the licence. I don't understand what the central bank is doing,” he said.

“The existing banks are not functioning properly. Some banks are in a very bad state. Bringing more banks into the fold in this situation is bewildering."