Vol. 5 Num 1071 Wed. June 06, 2007  

Sonali Bank becomes public limited company

Sonali Bank, a nationalised commercial bank (NCB), yesterday got licence from the central bank to become a public limited company.

As per the licence, the bank will conduct their activities following the Memorandum and Article of Association instead of the Nationalised Bank Order, 1972.

The privatisation move empowers the bank's management (board of directors) to take policy decisions independently, though the government will remain as owner. The independent board of directors of the bank will appoint its managing director of its choice, according to sources.

After having a new shape as public limited company, the bank will have to follow the Bangladesh Bank rules and regulations like other private banks.

The government will issue notification through a gazette to add 'limited' after the bank's name. All liabilities and assets of the bank would be transferred to its new company name.

On June 3, Sonali Bank was registered with the Registrar of Joint Stock Companies and Firms to operate as a public limited company and on June 4, the bank applied to the Bangladesh Bank to get licence to run as a public limited company.

Earlier on May 30, two other NCBs -- Janata and Agrani -- received licences from the central bank to become public limited companies.

The new Memorandum of Article would give more autonomy to the three NCBs. The board of directors of the banks from now on will be able to fix up their employees' salaries.

The government has already gone for newspaper advertisements to choose managing directors for Janata and Sonali. Sources said the authority has so far received 34 applications for the posts.

World Bank and International Monetary Fund have long been calling for privatisation of the state-run banks. These two lending agencies have made it one of the major prerequisites for Bangladesh to receive Poverty Reduction Growth Facility loans.