City Bank PLC, one of the leading commercial banks in the country, is set to establish a new subsidiary company. The name of the company will be City Credit Bureau.
The decision to form this subsidiary was made at the bank’s 688th board meeting held on the afternoon of Thursday, September 25.
This information has been confirmed by sources within City Bank.
Details such as the paid-up capital of City Credit Bureau and whether it will be 100% owned by City Bank have not been disclosed. However, in a price-sensitive disclosure, the bank stated that the purpose of establishing this new subsidiary is to support the bank’s growth. Once it receives final approval and begins operations, City Bank will become the first bank in the country to have its own credit bureau.
It is worth noting that earlier this month, Bangladesh Bank granted preliminary approval to five private entities to establish credit bureaus, and City Bank is one of them. The other approved entities include:
- bKash Credit Bureau (by mobile financial service provider bKash)
- Credit Info BD
- First National Credit Bureau
- TransUnion (a US-based organization)
This is the first time private entities in Bangladesh have been allowed to establish credit bureaus. Currently, only the Credit Information Bureau (CIB) under the central bank, Bangladesh Bank, exists. This bureau maintains loan records of all borrowers from scheduled banks and non-bank financial institutions (NBFIs) across the country.
According to the law, if an individual or organization becomes a loan defaulter, they are ineligible for new loans from banks or financial institutions. Therefore, lenders are required to obtain a credit report and clearance certificate before issuing loans.
