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Employment Bank a specialised bank established in 1998 under the Act for Establishing Karmasangsthan (employment) Bank 1998. It commenced business on 30 June 1998 with the principal objective of providing credit to youths, especially the unemployed youths of the country, for the promotion of self-employment and economic activities. The bank provides credit financing for 33 income-generating activities. The authorised capital of the bank is Tk 3,000 million divided into shares of Tk 100 each. Of the total issued, subscribed and paid up capital of Tk 955 million in 1998-99, the government of Bangladesh paid 75% and the remaining 25% is allocated to and paid by some commercial banks (janata, agrani, sonali, uttara, pubali, rupali, national, IFIC, basic and islami bank and some non-bank financial institutions and insurance companies. The bank has its head office at dhaka and 68 branches (up to 31 May 2001) in the district headquarters including Dhaka city. A total of 285 employees including 127 officers of different grades are now working in the bank. Within the selected fields of economic activities, potential youths can undertake any income-generating project and receive financial support from the bank to run the approved projects. According to its lending policy, the Employment Bank does limit loan size to any minimum amount. The loan size depends upon the nature and size of projects but an individual may be given a maximum Tk 0.5 million as loan for a project. The youths may form groups to undertake projects; a group-based project can avail itself of a maximum of Tk 2 million in credit. The repayment schedule is varied depending upon the nature of activity, size of investments and flow of incomes from the projects. However a loan is to be repaid within a maximum period of 5 years. Interest rates had been variable and during the bank's operational period up to December 2000; the maximum lending rate recorded was 14% per annum. Upon repayment of installments on or before the expiry date, one receives a 3% rebate on the total amount of interest accrued on a particular loan account. Up to March 2000, the bank disbursed Tk 42 million in loans to unemployed youths. During the same period, total recovery stood at Tk 7 million. Deposits collected by the bank during 1999 were Tk 0.22 million and comprised savings deposits (Tk 14,596), staff provident fund (Tk 66,808) and staff superannuation fund (Tk 137,859).
The bank has no investment other than its lending. In
1999, its total assets were Tk 1,007 million, total incomes Tk 59 million,
and total expenses Tk 7 million. It earned a net profit of Tk 30.69 million
in the business year 1998-99.
[S M Mahfuzur Rahman]
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