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10 December 2023

Business Insider Bangladesh

Shakib Al Hasan rescues People’s Bank from licence cancellation

Sanjay Adhikari || BusinessInsider

Published: 22:06, 21 December 2021   Update: 11:16, 22 December 2021
Shakib Al Hasan rescues People’s Bank from licence cancellation

Photo illustration: Business Insider Bangladesh

Bangladesh’s star cricketer Shakib Al Hasan’s entry into the People’s Bank is likely to save the bank from licence cancellation.

“The bank is now ready to start operations,” said Abul Kashem, chairman of the proposed bank. He is a Bangladeshi expatriate living in New York, USA.

After securing a time extension thrice to fulfill regulatory conditions, Kashem says they are almost ready and don’t need a fourth extension.

“We have made all kinds of preparations. After submitting all the documents as per the requirements of Bangladesh Bank, we are ready to supplement any more info,” he told the Business Insider Bangladesh.

Kashem said Shakib and his mother may hold a total of two directorships in the board of directors of People’s Bank.

According to the rules of Bangladesh Bank, an aspiring director of a bank must hold a minimum of 2 percent share. So, a minimum capital of Tk 10 crore has to be provided for each post of director for the People’s Bank.

However, it is learned that Shakib is providing more than Tk 25 crore worth of capital to obtain the fractional ownership – 4 percent or more.

On February 17, 2019, the Bangladesh Bank issued letters of intent (LOI) to three new banks - People’s Bank, Bengal Commercial Bank and Citizen Bank.

Out of these three, Bengal and Citizen Banks have already started their operations. But People’s Bank failed to meet the regulatory requirements, including paid-up capital and prayed for more time until December 2021.

Although nearly three years have passed by since the initial licence was received from the central bank, People’s Bank has not been able to start their commercial activities.

Bangladesh Bank came up and said while extending time for the third time: “For special reasons, the time has been extended till December 31 for the last time.”

The letter of intent (LOI) issued will be considered void if the applicant fails to apply for the licence through meeting all the conditions within the stipulated time, BB warned.

While responding to a query, Kashem said, “The government has given us preliminary permission to set up the bank after considering all aspects. It may take some more time to accomplish such a vast job. We have no problem with capital and directorship”.

Asked, Serajul Islam, executive director and spokesperson of Bangladesh Bank, said the proposed People’s Bank sought three more months to meet the conditions of the LOI.

“The (BB) board has given time in response to their application. If they do not meet the conditions this time, their LOI will be cancelled as per the rules,” he added.

Islam further said, “However, there are still 10 more days left. If the bank submits the required documents by this period, the central bank will check and scrutinise them before taking a final decision”.

Earlier, the company was accused of claiming a credit as their paid-up capital which was detected by an investigation. In such a situation, several directors have been withdrawn from the initiative to establish a bank.

Again, two more directors have been dropped on the instructions of the central bank over some alleged irregularities.