Dhaka Bank eyes Kolkata to set up first offshore branch

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Published: January 23, 2020 9:50:24 AM

After Kolkata, Dhaka Bank will set sight on north-eastern states for rolling out branches where trade, commerce and people to people connection are upbeat.

Dhaka Bank, banking sectorDhaka Bank, which has 140 branches across Bangladesh, would be third Bangladeshi bank after Sonali Bank and Arab Bangladesh Bank to have a branch in India.

Dhaka Bank, one of the top 10 private banks of Bangladesh, is eying Kolkata to open its first overseas branch in the wake of increased trade and commerce and people to people connection between India and Bangladesh.

Dhaka Bank managing director Enamul Huq told FE on the sidelines of the ‘Eastern Union’ economic summit that India, especially Kolkata, has become a favourite destination for many Bangladeshis because of healthcare, education, trade and even tourism.

The number of visitors from Bangladesh to India has increased manifolds over the past few years and many have invested in properties and have set up businesses in Kolkata. In such a situation, having a branch in Kolkata would be commercially beneficial and “we are working on it”, Huq said.

He said the entire plan is at the drawing board stage. Dhaka bank would need permission from the central banks of both India and Bangladesh before finalising its operation.

“There are certain RBI norms which are coming in our way”, Huq said. “The minimum paid-up capital requirement for opening a bank branch in India is $25 million or `200 crore in Bangladeshi currency (taka). This is too heavy for us. The RBI needs to be flexible at least in this matter.”

After Kolkata, Dhaka Bank will set sight on north-eastern states for rolling out branches where trade, commerce and people to people connection are upbeat.

Dhaka Bank, which has 140 branches across Bangladesh, would be third Bangladeshi bank after Sonali Bank and Arab Bangladesh Bank to have a branch in India. Bangladesh, at present, has 42 private banks operating in the country.

Haq said Dhaka Bank is also keen to have its foot print in Hong Kong and Malaysia, but it wants to start with a remittance house or finance company to fund trade before coming up with a full-fledged bank.

He said both India and Bangladesh could be a strong partner in the proposed world’s largest trading block, the ‘Eastern Union’, which is a proposed alliance of nations of the Indo-Pacific region.

The eastern and the south-eastern part of the globe is having the world’s largest regional trading group, accounting for 47% of the global population, more than 32% of the global economy and 29.1% of the global trade. The Regional Comprehensive Economic Partnership (RCEP), which includes 16 countries from South-east Asia, East Asia and Asia Oceania will have far-reaching impact on production, consumption and trade after more than a dozen countries in the Asia-Pacific sign the agreement.

Huq said a common currency with a custom union could provide the basic platform for forming an ‘Eastern Union’ whose geographical expanse could range from the coast of East Africa across the Indian Ocean to Western Pacific including countries like Japan and Australia.

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