No more banking, insurance by cooperatives
Courtesy New Age 24/10/07
The government will amend the Cooperatives Society Act 2001, seeking to bar cooperatives from running banking and insurance businesses, after many such organisations have been found engaged in the fraudulent practice of collecting deposits, even from non-members, sources in the central bank said.
Many people fall prey to their lucrative offers of high returns and in the end lose all their savings, said a Bangladesh Bank official.
Under the Bank Company Act, which was amended through an ordinance on October 8, cooperatives are barred from using the word ‘bank’ in their names but can run banking and insurance business, which is why the government wants to amend the Cooperatives Society Act 2001, he said.
A committee was assigned to prepare the draft amendment bill, he said. ‘The draft bill has already been prepared and will be submitted to the rural development and cooperatives division next week.’
Banking and insurance are specialised operations and should be performed by specialist organisations, he observed.
The government has recently amended the Bank Company Act where it barred the cooperatives to use the word ‘bank’ in their names.
Fourteen cooperatives currently have the word ‘bank’ in their names.
Eight of these are active: The Dhaka Mercantile Cooperative Bank Limited, Aziz Cooperative Commerce and Finance Bank Limited, The Dhaka Urban Cooperative Bank Limited, Adarsha Samabay Bank Limited, The Commercial Cooperative Bank Limited, Social Cooperative Bank Limited, Merchant Cooperative Bank Limited and Crescent Cooperative Bank Limited.
The rest are inactive: The Mymensingh Town Cooperative Bank Limited, The Small Cooperative Bank Limited, Urban Samabay Jomi Bandhaki Bank Limited, Sirajganj Urban Cooperative Bank Limited, Parbatipur Kendriyo Samabay Bank Limited and Mulghar Cooperative Bank Limited.
The government has, meanwhile, cancelled the registration of three cooperatives for using the word ‘bank’ in their names. These are Begumganj Urban Samabay Bank Limited, Naogaon Urban Cooperative Bank Limited and Chuadanga Peoples Cooperative Bank Limited.
There are two cooperatives which bear the word ‘insurance’ word in their names. These are Bangladesh Cooperative Insurance Limited and Bangladesh Cooperative Life Insurance Limited.
[Disclaimer: ALOCHONA Management is not liable for information contained in this message. The author takes full responsibility.]
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