The New Nation - Internet Edition

UNDER the financial sector reforms programmes (FRSP), the government-owned Rupali Bank was subjected to some reforms and prepared for sale. Now, the remaining nationalised commercial banks (NCBs) - Sonali, Janata, and Agrani - would be gradually privatised. The shares of these banks would be aimed for sale eventually to members of the public. It appears that the central bank would reserve some rights to scrutinise the appointment of the directors of these banks and recommend changes, if necessary, or to select persons in accordance with its suggestion.

The central bank would be also probably keeping some control over these banks in their policy directions. One of the main arguments that had been extended for the retention of banks in the public sector was that these were expected to carry out some banking services in the interest of common people such as running banking services in non-urban areas and meeting the credit needs of small existing or potential entrepreneurs. Therefore, an obligation on the part of corporatised banks to retain an interest in these areas, seems to be only pragmatic.

The main aim of corporatisation would be to recast the management of the NCBs. Presently, their managements are infested with people owing their allegiance to the employees' unions of the banks. Such is their influence that they are still able to control appointment and transfer of the officers even in high ranking posts. Even some loans from these banks are said to have links to these unions. No wonder, therefore, that the classified loan burdens of these banks have become so massive in size. It should be only logical and practical to think that once corporatised the banks would become more competent and operationally much unencumbered to do their work.