The government has decided to provide Tk 2.50 billion to Probashi Kallyan Bank (PKB), a specialised bank, to help it become a scheduled bank, sources said.
The decision was taken at a meeting Tuesday at the ministry of finance (MoF) with Finance Minister AMA Muhith in the chair.
The bank needs to have Tk 4.0 billion as paid-up capital for becoming a scheduled bank. Presently, the bank's paid-up capital is Tk 1.0 billion.
The meeting also decided that the Wage Earners' Welfare Board (WEWB) will provide the remaining Tk 500 million as equity. The Board as of now is the majority shareholder of the bank.
The meeting also decided that after its conversion into a scheduled bank, the PKB will start general banking activities on a limited scale among migrant workers, returnees, and their relatives through collecting deposits and providing loans.
According to officials, the PKB, as a non-scheduled bank, is not allowed to carry out the functions of a scheduled bank.
The move to turn PKB into a scheduled bank was taken recently aiming to utilise it for bringing more remittances to the country through legal channel as inward remittance flow has been declining.
Prime Minister Sheikh Hasina had asked the ministries concerned to take steps for bringing remittance through PKB alongside existing channels to help raise the inflow.
Last December, the ministry of expatriates' welfare and overseas employment (MEWOE) at an inter-ministerial meeting discussed ways for turning the PKB into a scheduled bank and searched for options to get money for raising its paid-up capital.
The PKB was established in 2010 to provide collateral-free loan to workers going abroad for employment, give loan to returnees to rehabilitate them with employment within the country, facilitate sending remittance, and encourage the wage-earners to invest in the country.
The bank has 54 branches across the country and a booth at Hazrat Shahjalal International Airport. It accepts deposits, extends loans to migrant workers and returnees, and buys and sells foreign currencies.
Up to November 2016, the PKB sanctioned loan worth Tk 890 million.