Bangladesh Bank rejects LOI extension application of proposed People's Bank

Bangladesh Bank has rejected the application seeking a time extension to meet the conditions of the letter of intent (LOI) issued in favour of proposed People's Bank Limited, which is awaiting final approval.

Star cricketer Shakib Al Hasan wanted to be the entrepreneurial director of the proposed bank.

The decision to reject the application was taken at a board meeting of Bangladesh Bank on Thursday.

Bangladesh Bank spokesman and executive director Md. Serajul Islam confirmed the development, reports UNB.

He said the LOI of the proposed bank was valid till December 2021 and their application for an extension of time has been rejected as they could not meet the conditions within the stipulated time.

People's Bank could not start operations due to a lack of arrangement of paid-up capital of Tk 5.0 billion.

Consequently, the bank is not getting the final license of Bangladesh Bank.

According to the rules of Bangladesh Bank, an aspiring director of a bank must hold a minimum of 2 per cent share. So, a minimum capital of Tk 100 million 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 250 million worth of capital to obtain the fractional ownership of 4 per cent 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.