The Karmasangsthat Bank Bangladesh was established in June 1998 soon after the lawmakers had passed a special Act called “The Karmasangsthan Bank act 7 of 1998” in the Jatiya Sangsad.
The Bank started its function with an initial Authorized Capital of Tk. 300 crore of which Tk. 100 crore was paid up. Initially, the Government provided capital to the extent of Tk. 75 crore and the remaining 25 crores were provided by Nationalized banks and other financial institutions.
It is a bank by name but it does not accept deposits from the public like other banks. It is virtually a non-banking financial institution that lends money only to the unemployed youths of the country for self-employment.
A large number of youths in our country remain idle because they neither get a job in the Government/Non-government Organizations nor do they have any fund of their own to undertake any business for their self-employment with the result that the nation is deprived of the services form these youths.
It has been felt that if these youths are purposefully and effectively utilized, they could become a vital working force to the country for any nation-building activities.
With a view to generating and encouraging self-emolument spirit and opportunities among the increasing young generation of Bangladesh, the Government has established the Karmasangsthan Bank to provide necessary financial assistance to the interested and able unemployed youths.
Based on this objective, the bank has taken up an action plan to open branches all over the country up to Upazilla level to facilitate youths to get finance at their doorstep for undertaking any venture for self-employment.
The bank extends loans up to Tk. 50,000/- without any collateral. It allows a maximum loan of Tk. 5 lac to an individual and Tk. 25 lac to a group of 5 youths against collateral. It is a supervised credit.
The lending procedure has been made simple for quicker disposal of the proposal. Interest in charge @ Tk. 14% p.a. at a simple rate with provisions to allow a rebate of 3% if the loan is repaid as per terms and conditions.
The bank has primarily identified 30 specific lending sectors which are as under:
- Shrimp culture,
- Fodder Factory,
- Sewing machine,
- Mixed farming,
- Horticulture, Sericulture, Nursery, vegetable, and fruit processing project,
- Agri-tools manufacturing factory,
- Salt factory,
- Chira Kol,
- Beef fattening/Goat rearing,
- Agro-based food processing,
- Computer training/service, software,
- Photocopy service center,
- Bee farming and honey procuring project,
- Mushroom project,
- Drug business,
- Grocery and departmental store,
- TV, VCR, and electrical equipment repairing workshop,
- Saloon and Laundry,
- Transport excluding two-stroke engine),
- Wood and steel furniture manufacturing,
- Block and boutique printing,
- Soap factory,
- Rural sanitary latrine manufacturing,
Besides these, the bank also lends to the unemployed youths in any productive and economically viable projects.
The bank has introduced and a compulsory saving deposit scheme for the borrowers @Tk. 10/- on a loan of taka one lac and Tk. 20/- exceeding taka one lac per week.
This enables the borrowers to build up handsome savings in their accounts while they will pay back the loan to the bank.
This bank is unique of its kind with a special object.
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