Finance Minister AHM Mustafa Kamal has defended the central bank’s approval of three more private banks even though economists and bankers have long been opposing the move.
“The central bank has approved the new banks because it thinks that it is necessary,” the minister told reporters at the Secretariat on Monday, reports bdnews24.com.
The minister said he will not concerned about the number of banks if quality of service remains good.
In 2012, twelve private banks were given licences based on ‘political considerations’ by the Awami League, which drew criticism from different quarters.
Over the last few years, the banking sector has made headlines because it is struggling with rising numbers of bad loans, financial scams, irregularities and a liquidity crisis.
Despite these anomalies, the central bank issued licences to some banks, giving in political pressure last year.
At the end of his tenure, AMA Muhith, the predecessor of Kamal, had admitted that Bangladesh’s banking sector became “too large”.
Economists and bankers have continued to raise their voices against the new banks, arguing the market was already saturated.
But on Sunday Bangladesh Bank approved the three more private banks-- People’s Bank, Citizen Bank and Bengal Bank--within the first month and a half of the Awami League’s third consecutive term.
With the new additions, the number of banks in Bangladesh will rise to 62.
