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The government seems to be in a hurry to operationalise the proposed Sammilito Islami Bank to be formed through merger of five severely liquidity-crisis-ridden Islamic banks.

As part of the hectic move, Bangladesh Bank (BB) following request of the Ministry of Finance (MoF) has already opened current account with the central bank for the proposed largest unconventional bank before it gets license from the regulator, which is a violation of the regulation.

According to the regulation, the commercial bank needs to complete all the formalities to get license from the banking regulator within six months of securing LoI (letter of intent) from the regulatory body.

The central bank has issued LoI in favour of the proposed shariah-based bank on November 09 last. Within 18 days, the current account was created on November 27 last, reflecting how fast things are being processed.

Seeking anonymity, a BB official said there is a pre-condition to secure license that commercial bank will have to deposit its paid-up capital first to any scheduled bank for getting the license.

But the authorities of the proposed bank did not do it. Instead, it opened a current account, which is a post-license affair, with the BB’s account and budgeting department on Thursday last. No fund is yet to be deposited till now.

“This is the first time in the history of the central bank current account was created before the license,” the BB official said.

The central banker said the proposed Sammilito Islami Bank gets its name clearance but it did not submit the certification of incorporation to the BB, which is also mandatory for the license.

On condition of not disclosing identity, an official at Treasury and Debt Management wing of the ministry of finance said they have been processing all the formalities simultaneously considering importance of the matter.

“But we’re not doing anything desperately. We’re following all the regulations required. We don’t want to make anything delay,” he said.

Another BB official, who also prefers to be anonymous, said the ministry seems to be in a hurry to complete the license proceedings. A board meeting of the proposed bank is scheduled to be taken place tomorrow (November 30) where all things, including the license, might be completed.

“That’s probably the reason behind the hurry of the ministry,” the official said.

The central banker also informed that the ministry concerned earlier formed a seven-member board of the proposed bank in hectic way without properly assessing the existing regulations.

As a matter of fact, the ministry has reconstructed the board again with including two – one former government secretary and one current secretary – directors in place of finance division secretary Md Khairuzzaman Mozumder and Secretary of the Financial Institutions Division (FID) Nazma Mobarek, who was the chairman of the board.

The central banker said both Mr Mozumder and Mrs Nazma Mobarek were the part of Bangladesh Bank’s board of directors. Under the BB Order 1972, one cannot hold position in two boards.

“That’s why, they have been replaced by another two. But the equity shares of the bank will remain same,” the BB official said.
According to the official documents, a seven-member board of directors will be formed, headed by the finance secretary. Of the 20 billion shares, six directors will hold one share each, while the finance secretary will hold the remaining shares of the state-owned unconventional bank