An amendment to the relevant law is in the offing for the sell-off of government stake in Bangladesh Commerce Bank Ltd (BCBL). The act that provides for the establishment of the bank doesn't permit divestment.
Officials said the ministry of finance (MoF) has decided to incorporate a provision into the act under which BCBL was formed to make way for selling the government stake.
The decision comes in line with a directive from finance minister AMA Muhith, who in January this year at a programme in Sylhet hinted at sale of government shares in the bank, they added.
A senior MoF official told the FE there is no provision of selling or offloading shares in the Bangladesh Commerce and Investment Limited (Reorganisation) Act 1997 under which the BCBL was formed.
He said the government and three state-owned commercial banks own 45.25 per cent shares in the BCBL.
The official also said the finance minister is in favour of selling government's stake in the bank. To complete the process he has asked for interpolating a provision of selling or offloading shares of the bank into the BCBL act.
He said the government also decided to amend the section 5 (1) of the act allowing an increase in authorised capital and paid-up capital of the bank. According to the existing provision both authorised capital and paid-up capital of the bank are fixed at Tk 2.0 billion and Tk 920 million respectively.
According to the bank company act, a bank needs to have minimum Tk 4.0 billion as paid-up capital to run as commercial bank.
During its formation, the government as a sponsor of the bank was holding shares worth Tk 300 million, three commercial banks -- Sonali, Janata, and Agrani -- Tk 100 million, ten state-owned organisations Tk 417.5 million and private sector Tk 102.5 million.
In 2010 right shares were issued to raise the paid-up capital of the bank. Thereafter, the government's stake in the bank increased
to Tk 675 million, three state-owned banks' Tk 225 million, ten state-owned organisations' Tk 986.20 million and private sector's Tk 102.5 million.
Another official said the MoF also decided to amend a section of the act related to the number of directors of the bank in line with an order of the High Court. It was decided that the number of directors of the bank will be according to the directives given by the central bank time to time.
He also said the MoF, however, turned down a proposal of BCBL to raise the lowest ceiling of holding shares of at least Tk 1.3 million to be elected C-grade member of board of directors of the bank. The MoF decided that the section 7 (4) of the act will remain as usual.
The official also said the issue now will be placed before the finance minister for his approval. "Once approved, those will be vetted from the ministry of law affairs and the act will be amended accordingly."
Seeking anonymity another MoF official said the finance minister is in favour of divesting government's stake in the state-owned banks as much as possible taking into consideration the burden the government needs to shoulder time to time.
At a meeting on recapitalisation of state-owned banks late last month the minister reportedly said the banks, except Sonali Bank, should be privatised as soon as possible, as they are incurring losses recurrently.
syful-islam@outlook.com
