Finance Adviser Dr Salehuddin Ahmed said on Tuesday that work is underway to provide compensation to shareholders of five private banks that were merged into Sammilito Islami Bank last year.
While the government has already compensated small depositors by allocating funds from the exchequer, shareholders who bought stakes in the banks from the stock market are yet to receive any compensation.
Speaking after a meeting of the Advisers' Council Committee on Government Purchase at the Secretariat, Dr Ahmed said, "The process is complicated and has to be implemented by phases after calculation."
He described the shareholders' issue as technical, saying that since the net asset value of most of the merged banks had turned negative, compensating the shareholders has become a complex matter.
Referring to the views of technical experts, the adviser said shareholders bought the shares and they are the owners of banks. Why the government should compensate them.
"However, I did not take it that way," he said. "They might have bought the shares based on market signals. Let's see what can be done."
"When a bank's financial condition becomes negative, it is not logical to unilaterally pass the entire liability on shareholders," he added.
Replying to a query, Dr Ahmed said developing a compensation model would take time.
As an example, he said shareholders who invested significant amounts could receive part of the compensation in shares of Sammilito Islami Bank and the remaining portion could be paid in cash.
On banking sector reforms, the finance adviser said the problems could not be resolved through sudden decisions. "The sector needs continuous reforms, capacity building of regulatory bodies, and restoring confidence in the market to address structural weaknesses," he said.
Dr Ahmed also listed a number of challenges the next government may face in steering the economy toward stable and sustainable growth.
He said the biggest challenges include revitalising industry and business, creating jobs, controlling inflation, reforming the banking sector, and strengthening institutional capacity.
The main challenge is activating the economy effectively, he said. "Unless business and industry are active, there will be no employment, and without employment, people's purchasing power will not increase."
He also said industrial base of the country is still weak and the economy is dependent on a limited number of export sectors. "Bangladesh cannot progress by following the Hong Kong or Singapore model. The realistic path is to strengthen small and medium enterprises," he added.
syful-islam@outlook.com
