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Govt to remove all legal roadblocks to Rupali privatisation, says Saifur
Govinda Shil
2/8/2006
The government has vowed to remove all the legal roadblocks by the end of this month in order to add steam to the process of Rupali Bank privatisation.
Finance and Planning Minister M Saifur Rahman made the pledge recently in a Memorandum of Economic and Financial Policies (MEFP) to the managing director of the International Monetary Fund (IMF).
"We have also revived the process of divesting Rupali Bank, which had been delayed by a court injunction," said a forwarding letter of Saifur to the IMF chief.
Besides, the letter said, several management support teams have already started working in Agrani, Janata, and Sonali banks in line with NCB reform programmes.
Those teams have suggested ways to improve the banks' operational performances, putting their finances on more solid footings.
Saifur said he had finalised a Preliminary Information Memorandum (PIM) for privatising the Rupali Bank and issued a public announcement requesting expression of interest (EoI) from the members of public on May 12.
Twenty potential investors had expressed interest, but a court injunction, which was finally dismissed in November, temporarily delayed the divestment drive. The government had infact intended to sell the bank to private takers, he explained.
"We recognise that NCB restructuring and divestment will be facilitated by granting bank managements and their support teams greater autonomy over day-to-day operations and strategic reforms…," said the finance minister.
He said the roles of the NCB working group facilitating reforms will be strengthened and the BB will regularly monitor the implementation of the restructuring measures.
Citing some initiatives taken under a government action plan, the letter mentioned some key actions.
These include revising the terms of reference for the consulting teams to give them authority to implement recommendations in collaboration with the management of the banks reconstituting the boards of directors of Agrani and Janata banks; holding NCB boards and management accountable against annual performance targets; and corporatising Janata and Sonali banks.
The letter further reiterated: "The government remains committed to the restructuring and eventual divestment of the NCBs and will take all necessary steps to ensure the timely implementation of the NCB reform programme."
The government will grant NCB managements and boards full autonomy in decisions consistent with the operational restructuring of the banks. In turn, the bank managements and boards will be held accountable and their performance will be measured against quantitative and qualitative performance targets being designed in consultation with the World Bank, said the letter.
As for divesting Rupali Bank, plugging of all the legal holes, making arrangements for the necessary waivers or approvals from the Ministry of Finance, Bangladesh Bank, Securities and Exchange Commission, local bourses and re-publication of the EOI were highlighted in the letter.
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