Basic bank is no longer a specialized bank.

2.  Specialized Bank
 Bangladesh Bank vs Finance Ministry
 Present situation of Basic Bank
Topics

3. About
• Started operations from 1989
• Govt. took 100% ownership in 1992
• Governed by Banking companies Act 1991
• Established as a specialized bank
• 50% of loanable fund shall be invested in small
and cottage industry sectors

4. 3 Types of Industries
• Cottage Industry
• Small Industry
– Resource value in between.05-15 million other than land and
buildings
– Not more than 50 employees
• Medium Industry
– Resource value in between 15-200 million other than land and
buildings
– Not more than 150 employees

5. Why Specialized Banks?

6. Why Specialized Banks?
• CB doesn’t have unlimited resources
• CB’s main concern is trade & commerce
• CB’s lack of long term investment
• CB’s lack of expertise
• Supervision and monitoring problem

7. Specialized Banks in Bangladesh
• BKB in 1972
• BDBL in 2010
• RAKUB in 1986
• Basic Bank in 1989

8. Special features of Basic bank
• State owned bank
• Not nationalized, it operates like private bank
• Specialized bank

9. Specialized Banks(3)
Private
Commercial
Banks (40)
GOOD
BYE!! BASIC
THANKS GOD!! This
was a horrible time
for me being a
specialized Bank!

10. What the changes are ?
• It doesn’t have to invest at least 50% in small scale industry
• It will need NOC certificate to appoint directors
• Specialized Bank doesn’t need NOC certificate from central bank

11. BB vs Finance Ministry
• Finance ministry appointed director without informing BB
• BB states that Finance ministry must have BB’s NOC

12. Basic’s present condition
• Lending loans amounting 45 billion over 5 years
• Most of them remained unpaid
• IBs rejected L/C opened by Basic bank
• Deficit of the Bank’s Capital stands at 16.76 billion
• Half of it’s 68 branches running up losses

13. May God Bless You All!