The Bangladesh Bank has rejected the application which seeks a time extension to meet conditions of the letter of intent (LOI) in favour of proposed People's Bank Limited.
The application is still waiting on final approval from the central bank.
Cricketer Shakib Al Hasan was looking to become the entrepreneurial director of People's Bank Limited.
"The decision was taken in a board meeting on Thursday," Executive Director of Bangladesh Bank Serajul Islam told The Business Standard.
Serajul Islam said the LOI of the proposed bank has expired since December 2021. Their application has been denied as they could not meet the conditions in time.
It has been reported that People's Bank failed to arrange a capital of Tk500 crore, and therefore could not start the operations.
Therefore, the Bangladesh Bank is not granting the final license for the proposed bank.
The rules of Bangladesh bank state that a director of a bank must hold at least a 2% share. Thus, each director must provide a capital of at least Tk10 crore.
Although, Shakib is reportedly providing capital of over Tk25 crore to attain ownership of 4% or above.
Earlier, on February 17 2019, the Bangladesh Bank issued letters of intent (LOI) to three new banks - People's Bank, Bengal Commercial Bank and Citizen Bank.
Of these, Bengal and Citizen Banks have already begun their operations. Though, People's Bank failed to meet the requirements, including paid-up capital and requested more time.