The New Nation - Internet Edition

BUSINESS REPORT

Finance Adviser Dr Mirza Azizul Islam has said the government-owned commercial banks (GCBs) still remained at a premature stage to float shares in the stock market.

"Their bottom lines are not in a comfortable position. Listing of the banks should be a mid-term (2-3 years) target," he told a seminar at Bangladesh-China Friendship Conference Centre.

"Even if the SEC (the Securities and Exchange Commission) allows listing of the banks, the shares will receive poor value," he said.

Janata Bank, which eyes on becoming a leading bank in South Asia by 2010, organised the seminar titled "Steps Towards Making Janata the Effective Largest Bank in Bangladesh", with the bank chairman Suhel Ahmed Choudhury in the chair.

The bank's profit increased by about 10 per cent to Tk 303 crore in June 2008 from Tk 276 crore in June 2007.

Finance secretary Dr Mohammad Tareque, NBR chairman Muhammed Abdul Mazid, Bangladesh Krishi Bank chairman Khondker Ibrahim Khaled and Dhaka University professor Dr Mahmud Osman Imam also spoke at the seminar. Prof. Dr Toufique Ahmad Choudhury of Bangladesh Institute of Bank Management (BIBM) presented the keynote paper.

The Finance Adviser agreed with the suggestion for listing the GCBs with the stock exchanges, but differed with the views that the banks should hire CEOs and deputy CEOs for the divisional headquarters on contract at market price.

He endorsed the weakness that the service rules of the GCBs, like that of the government service rules, are sometimes rigid that offer no reward for better performance and no punishment for no performance.

"We're trying to address the problem by giving more authority to the Board of Directors," he said, inviting all the GCBs to develop their service rules and submit to Finance Ministry for consideration and approval.

The Adviser asked the bankers to capitalise on the strength of extensive GCBs network across the country and emphasised on looking at indicators like return on equity and assets, capital adequacy (now running with capital inadequacies), shortfall of provisions, and sectoral and geographical distribution of loans and advances.

He said the GCBs should be profitable organisations from the commercial perspective, but the profit certainly is not the single objective - the banks should lend the productive sectors to help achieve accelerated growth.

"It's possible to optimise profits without compromising with the objectives," Dr Aziz added.