Kazi Zahidul Hasan :
The Ministry of Finance has signed ‘performance contracts’ with 14 state-owned enterprises (SoEs) in a bid to improve their overall governance, financial health and business portfolios, officials said.
They said that these SoEs are now facing immense operational challenges mainly due to their dismal business performance, deteriorating financial health and poor governance, leading the government to sign the performance contracts with them.
Secretary for the Bank and Financial Institutions Division (BFID) M Aslam Alam on Thursday signed the contracts on behalf of the Ministry of Finance while Chairmen and Managing Directors signed the contracts on behalf of their respective organisations in presence of Finance Minister AMA Muhith.
The SoEs are Sonali, Janata, Agrani, Rupali, BASIC (Bangladesh Small Industries and Commerce Bank Ltd), Bangladesh Development Bank Ltd, Bangladesh Krishi Bank (BKB), Rajshahi Krishi Unnayan Bank (RAKUB), Bangladesh House Building Finance Corporation, Karmasangsthan Bank, Ansar-VDP Unnayan Bank, Probashi Kallyan Bank, Jiban Bima Corporation, and Sadharan Bima Corporation.
“The Ministry has signed performance contracts with the SoEs in the wake of their bleak business performance, poor financial health and poor governance,” a senior official of BFID official told The New Nation on Friday asking not to be named.
He added, such contracts will establish a more effective and rigorous performance monitoring system in the SoEs. This will help the SoEs to improve their overall governance, financial health and business performance.
Under the contracts, they would have to improve their performance on certain operational and governance areas that would also ensure accountability, transparency and fairness of their management, identify operational lapses and enhance productivity.
“Earlier, we have found both operational and management lapses in the SOEs, especially in the public banks, leading to their declining financial and business performance. So, improvement of their overall governance and financial health is necessary to make them competitive and financially sound in line with the private sector banks,” he noted.
The BFID official further said that not only public banks, the government is keen to infuse dynamism in the boards and managements in other state-owned enterprises to improve their overall governance. “The government would provide necessary policy supports to the SoEs for improving their productivity and management efficiency to transform those into profitable ones,” he added.
He added that the government can earn higher revenues through boosting their (SoEs) productivity and business.
“SoEs will come under intense government monitoring by the performance contracts. The Ministry of Finance on behalf of the government will evaluate their performance on regular basis. This system will also help reduce their financial and operational risks making them sustainable,” he said.
Under the contracts, the public banks will be liable to reduce their non-performing and bad loans, enhance recovery of outstanding loans, increase deposits and farm loans and improve their business portfolios.
The Ministry of Finance has signed ‘performance contracts’ with 14 state-owned enterprises (SoEs) in a bid to improve their overall governance, financial health and business portfolios, officials said.
They said that these SoEs are now facing immense operational challenges mainly due to their dismal business performance, deteriorating financial health and poor governance, leading the government to sign the performance contracts with them.
Secretary for the Bank and Financial Institutions Division (BFID) M Aslam Alam on Thursday signed the contracts on behalf of the Ministry of Finance while Chairmen and Managing Directors signed the contracts on behalf of their respective organisations in presence of Finance Minister AMA Muhith.
The SoEs are Sonali, Janata, Agrani, Rupali, BASIC (Bangladesh Small Industries and Commerce Bank Ltd), Bangladesh Development Bank Ltd, Bangladesh Krishi Bank (BKB), Rajshahi Krishi Unnayan Bank (RAKUB), Bangladesh House Building Finance Corporation, Karmasangsthan Bank, Ansar-VDP Unnayan Bank, Probashi Kallyan Bank, Jiban Bima Corporation, and Sadharan Bima Corporation.
“The Ministry has signed performance contracts with the SoEs in the wake of their bleak business performance, poor financial health and poor governance,” a senior official of BFID official told The New Nation on Friday asking not to be named.
He added, such contracts will establish a more effective and rigorous performance monitoring system in the SoEs. This will help the SoEs to improve their overall governance, financial health and business performance.
Under the contracts, they would have to improve their performance on certain operational and governance areas that would also ensure accountability, transparency and fairness of their management, identify operational lapses and enhance productivity.
“Earlier, we have found both operational and management lapses in the SOEs, especially in the public banks, leading to their declining financial and business performance. So, improvement of their overall governance and financial health is necessary to make them competitive and financially sound in line with the private sector banks,” he noted.
The BFID official further said that not only public banks, the government is keen to infuse dynamism in the boards and managements in other state-owned enterprises to improve their overall governance. “The government would provide necessary policy supports to the SoEs for improving their productivity and management efficiency to transform those into profitable ones,” he added.
He added that the government can earn higher revenues through boosting their (SoEs) productivity and business.
“SoEs will come under intense government monitoring by the performance contracts. The Ministry of Finance on behalf of the government will evaluate their performance on regular basis. This system will also help reduce their financial and operational risks making them sustainable,” he said.
Under the contracts, the public banks will be liable to reduce their non-performing and bad loans, enhance recovery of outstanding loans, increase deposits and farm loans and improve their business portfolios.
