DHAKA, March 23: The government of Bangladesh has finally decided not to privatize, liquidate or merge Sonali Bank, the largest public sector commercial bank in Bangladesh
, defying insistence of multilateral lending agencies like the International Monetary Fund and the World Bank.
The ministry of finance has made the decision after intensive consultation with the Bangladesh Bank, the central bank of the country, over the last two weeks.
"We have decided not to divest Sonali Bank, taking into account the services it has rendered in rural areas and the treasury functions it offers to the government," said New Age, a Dhaka-based national daily quoting "a high official of the finance ministry".
Sonali Bank, with a paid-up capital of over $60million, has 1,294 branches, 871 of these in rural areas, and more than 26,000 people on its payroll. However, in an aide-memoire, issued in the first week of March, the IMF asked the government to privatize all the four nationalized banks - Rupali, Agrani, Janata and Sonali. The IMF wanted Rupali Bank to be privatized by December 2004, Agrani Bank by December 2005, Janata Bank by December 2006 and Sonali Bank by December 2007.
Earlier in December 2003, a World Bank aide-memoire also asked the government to privatize the nationalized banks. The World Bank did not detail any schedule for privatizing the NCBs, but asked the government to prepare the resolution strategy by March 15.
The government failed to meet the deadline. It has not yet finalized the detailed resolution for Agrani and Janata banks either, sources at the central bank said.
Meanwhile, the finance ministry sources hinted to the press that Janata Bank, the second largest nationalized bank, could be partially privatized "after a certain period of time" and that the government might opt for a strategic partner for Agrani over a longer term.
