FBCCI seeks to establish virtual bank, MFI and university

The Federation of Bangladesh Chambers of Commerce and Industries (FBCCI) seeks to set up a virtual bank of its own to disburse mortgage-free loans to small and medium entrepreneurs.

The organisation also wants to set up a Micro Finance Institute (MFI) to disburse microcredit to new marginal and micro-level entrepreneurs alongside introducing an insurance company to insure unsecured loans on easy terms and facilitate various types of insurance for traders.

The trade body has also started work to establish a university and a medical college.

FBCCI President Sheikh Fazle Fahim told The Business Standard on Saturday that the organisation has taken name clearance for the university already.

"Many small and medium entrepreneurs do not get bank loans failing to meet collateral requirements. The FBCCI has taken initiative to set up a bank to provide loan facility to them on easy terms," he told The Business Standard.

"Unsecured loans that the bank will disburse will be insured. We will also establish an insurance company to provide other types of insurance required in the business," he added. 

Sheikh Fazle Fahim further said, "I have already talked about the establishment of the bank, insurance company and MFI at the concerned level of the government and got positive feedback from there."

He noted that applications for the license will be made after the board of directors approves the proposal to establish the bank on Sunday.

"Our proposed bank will be a virtual bank. It will be conducted following the prevailing banking laws," FBCCI senior Vice president Siddiqur Rahman told The Business Standard. 

A direct Bank or a virtual Bank is a bank without any branch network that offers its services remotely via online banking and telephone banking or through an independent banking agent network and may also provide access via ATMs, mail and mobile. Direct banks reduce the significant costs of maintaining a branch network.

Although various government agencies including Bangladesh Army, Border Guard Bangladesh, Bangladesh Police and Ansar-VDP had got licenses for separate banks earlier, no bank was established in the country under the ownership of any business organisation.

In April 2020, the government started implementing a Tk20,000 crore incentive package for the cottage, micro, small and medium industries through banks, but traders and researchers have been saying that CMSMEs are not getting the loan facility as most of them failed to fulfil requirements.

According to Bangladesh Bank data, as of 30 March, 91,434 entrepreneurs have received loans worth Tk14,465 crore from the package and most of them operate at a medium level. 

While discussing objectives behind establishing the university, the FBCCI president said the institution will be run through industry-university collaboration to develop the necessary human resources for the industrial sector. 

"The University of Toronto, Canada will train teachers and develop the curriculum of the FBCCI's proposed university," Sheikh Fazle Fahim told The Business Standard. 

According to FBCCI sources, the organisation has a 35,000-square-foot establishment in Hatkhola in the capital where it wants to start the activities of the university.