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Karmasangsthan Bank, The


Karmasangsthan Bank, The was founded as a public sector specialised bank in 1998. The government launched the bank on 30 June with an approved capital of Tk 3000 million divided into 30 million shares of Tk 100 each under the Karmasangsthan Bank Act. Out of the paid capital of Tk 1185 million (2008), the government of Bangladesh paid 75% shares and the rest 25% was paid by public and private sector banks including Janata Bank, Agrani Bank, Sonali Bank, Uttara Bank, Rupali Bank, National Bank, IFIC Bank, BASIC Bank and Islami Bank Bangladesh and a few non-banking financial institutions and insurance companies. The prime adjective of the bank is to alleviate poverty from the country by providing credit facilities to unemployed youths, both male and female, to make them self-employed. The bank provides loan with a lower and simple interest rate on easy term. The bank has now (2011) 134 branches throughout the country with its head office in Dhaka. A total of 817 employees including 233 officers are extending the countrywide services of Karmasangsthan Bank.

The Bank implements its own micro-credit programme to make the unemployed youth self-reliant beside the government's special programmes including the Agro-based Industrial Credit Scheme and the collateral free microcredit programme for the retired and retrenched industrial workers and staff. The Bank disbursed a loan of Tk 6370 million to 146,999 unemployed males and females upto 2009. The Bank also realised Tk 4863 million against the dues of Tk 5388 million from them within that period. The cumulative rate of realisation was 90.3%.

The Bank disbursed as total collateral free microcredit of Tk 739 million to 13,556 retired and retrenched industrial workers and staff upto 2009. During this period, it realised Tk. 478 million against the dues of Tk 638 million from them. The cumulative rate of realisation was 74.9 percent. Under the Agro-based Industrial Credit Scheme, the Bank disbursed a total loan of Tk 483 million to 1831 entrepreneurs' upto 2009 and realised Tk 297 million against the dues of Tk 326 million from them within that period. The cumulative rate of realisation stood at 91.1 percent.

Basic facts and economic indicators (in million Taka)

Indicators 2004 2005 2006 2007 2008 2009
Authorised capital 3000 3000 3000 3000 3000 5000
Paid up capital 985 985 1085 1085 1185 2485
Reserved Fund 190 153 159 192 216 260
Deposits
a) Call Deposits
b) Term Deposits
Loans and Advance 262 1107 1506 1641 1914 2236
Investment - - - - - -
Total Asset 1396 1726 2141 2423 2744 4282
Total income 124 121 142 162 195 230
Total Expenditure 79 95 94 107 116 139
Foreign Currency Trading
a) Export
b) Import
c) Remittance
Total Manpower 86 620 690 678 703 817
a) Officers 145 188 219 219 233
b) Staff 475 502 459 484 584
Correspondent Banks - - - - - -
Total Branches (in numbers) 85 92 92 92 103 134
a) Domestic - 92 92 92 103 134
b) Overseas - - - - - -
Agriculture Credit
a) Loan Disbursed 97 203 321 231 565
b) Realised 91 94 169 181 358
Industrial Credit
a) Loan Disbursed 39 125 92 107 149
b) Realsied 33 39 86 137 204
Loan Outstanding by Sector
a) Agriculture and Fisheries 338 369 466 598 643
b) Industry 159 174 230 444 498
c) Trade and Commerce 301 342 434 510 583
d) Poverty Reduction - 16 335 175 333

Source Government of Bangladesh, Ministry of Finance, Banking and Financial Institution Division, Bank o Arthik Prothisthan Samuher Karjaboli (Annual Report on Banks and Financial Institutions), 2004-05 to 2009-10.

Presently, the Bank provides loan for setting up of the following projects: poultry farm, dairy, fish farm, beef fattening and goat-rearing, tailoring and sewing, handicrafts and cottage industries, handloom, pottery, hair-cutting saloon, and laundry, transportation (except two-stroke engines), wooden and steel furniture, boutique, computer, photo-copying, automobile and light engineering workshop, rural transport business (van, rickshaw, boat etc), stationary and departmental store, radio-TV and electrical goods repairing workshop, rural sanitary, pharmacy and nursery. Beside, any profitable, productive and service-oriented economic initiative is given due consideration by the Bank for granting loan.

Karmasangsthan Bank grants a maximum amount of Tk 1.00 million to an individual and Tk 4.00 million to a joint venture. The interest rate per year is ten percent for productive and service sectors and twelve percent for commercial sectors. [Muhammad Abdul Mazid]