A bank for expats, by expats

Labour London Assembly Member Murad Qureshi said: “It goes without saying that if in practice it is to be an NRB Bank, then a majority of sponsor shareholding must be by NRBs, by a clear figure as well.”

The government has decided to set up a new bank that is owned equally by non-resident Bangladeshis and locals. The NRBs will provide Tk 400 crore in paid-up capital, while the rest will be raised through a public offering.

The central bank has also published a set of criteria to evaluate the application forms.

Qureshi welcomes the government initiative taken for the NRBs. “We now need details. The details need to be sorted out.”

“It is very important to appropriately set up the NRB bank so that the NRBs can continue to assist in the development of the Bangladesh economy,” said Qureshi, whose parents are from Sylhet.

“For it to be a proper NRB bank, the NRBs have to make up of majority shareholding. The nature of the bank demands it as most of its customers live abroad, not here. It needs more than 50 percent ownership from people living abroad. It could be 60 percent or possibly 80 percent.”

An avid cricket fan, Qureshi lives in Central London and was recently in Dhaka to watch the World Cup matches.

He said the minimum shareholding stake of Tk 100 million is far too high for any sponsor living abroad, particularly in the UK.

“Some people in Bangladesh may have Tk 100 million, but NRBs do not have that amount of money. NRBs living abroad are doing well, but they have probably about a million taka to invest.”

“If you go any higher than a million pounds or dollars, you will get fewer shareholders from the NRB community living in the US, Europe or the Middle East,” he told The Daily Star in an interview.

He said the investment threshold should be lowered. “I think realistically. Many NRBs will not have a 100 million taka. What is more realistic is one million taka. This figure can attract people living in London and other parts of the world.”

The Bangladesh Bank circular says sponsors’ contribution to the share capital of the proposed bank will be required to be out of net worth declared to the concerned tax authorities, contribution out of borrowings shall not be acceptable. It also says tax returns and certificates have to be submitted. He said these clauses would be unnecessarily prohibitive.

“The documentation process will be difficult for many to arrange, as the deadline for submitting their applications is by the end of May,” said the 45-year-old.

He said tackling these governance issues now would, in the long run, make sure that NRB remittance inflow is usefully targeted into productive investment, like roads and highways and the energy sector, via the bank rather then domestic consumption.

“With these improvements, I am sure many NRBs around the world will apply and happily work with the government of Bangladesh to improve their ancestral homes.”

Qureshi said the condition of NRBs in the Middle East is a matter of concern to every one. “I think they should be assisted by every means possible,” he said, referring to thousands of Bangladeshi migrant workers, who were forced to flee Arab countries, such as Egypt and Libya, following mass uprising.

He said billions of pounds and dollars flow into Bangladesh. “It is useful for the government and it is important for us to use the funds economically.”

More than 70 lakh Bangladeshis live abroad. Remittance added up to nearly $11 billion last fiscal year.

Qureshi said much of the remittance is spent on consumption. “The NRBs must develop a habit of investing on major infrastructure. This kind of a thing is critical. It will help Bangladesh achieve 10 percent GDP growth from 6-7 percent growth, if we can make sure the money enters productive sectors, such as energy, transport, and roads and highways.”

“There is a huge inflow of remittance into Bangladesh. You need to better use the money,” said Qureshi, who holds an MSc degree in Environmental Economics from University College London.

“When I went to Sylhet to my grandparent’s home by car, I remember that the road from Dhaka to Sylhet was very dangerous.”

“Not only should the Dhaka-Sylhet highway be developed, but also other highways in the country. This is something, which I think, a lot of people living abroad would be happy to invest in. I think this is where the NRB bank would be very, very useful.”

The application fee of $15,000 is also a hurdle, he said. “I however will accept that as the money will be used to conduct appropriate verification of the applications.”

He said the bank should focus on clientele, who will have different needs from others, as most live abroad. “The bank’s clientele have to be dealt with differently. The task will be to help them invest in Bangladesh.”

Qureshi, a board member of BRAC UK, an international non-governmental organisation that is a part of the Bangladesh-based BRAC family, said he would be talking to other NRBs to find ways to invest in Bangladesh. “If we can get the details right, it will make a big difference.”

“We will be able to tell you clearly what is needed for the Bangladeshi communities in Rome, London, New York, Paris, California and Washington, if we have major shareholding by NRBs,” he said.

“This could a very good example to show to the rest of the world.”


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