Despite the 'good' suggestions from both people and institutions for not issuing new licenses for banks, Bangladesh Bank Board finally decided to give licenses for new banks, as you all know, I suppose. And again politics kicked out economics, unfortunately.
After reading the wonderful article (New Banks: Don’t Say ‘Yes’ If You Want to Say ‘No’) from T T Ram Mohan, I think, RBI is facing the similar problem as BB; however, the arguments that has given in Mohan's article for opening up new banks are good and BB can follow the similar objectives while making its guidelines for new banks. In addition to fixing large capital binding, BB can clarify in its guidelines why it thinks that the Bangladesh economy needs more banks at this moment: either for ensuring greater competition, or ensuring financial inclusion. And then how these new banks will ensure these objectives?
Here is the link of the article.
Thanks to Mr. Rashed Al Mahmud Titumir for notifying this.