IMF suggests fresh move on Rupali privatization

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Shakhawat Hossain
The International Monetary Fund (IMF) has suggested adoption of a new strategy on the Rupali Bank divestment following delay by the Saudi prince to strike the final deal, sources said.
Key steps are needed to advance the divestment programme of the National Commercial Banks (NCBs), including development of a new strategy for Rupali Bank divestment, said an IMF letter sent to the Finance and Planning Adviser Mirza Azizul Islam recently.
The Washington-based multilateral agency, according to the letter, also suggested divestment of Agrani Bank in line with international norms and practices.
The recommendations that were prepared after an IMF mission visited the Bangladesh capital in August last came at a moment when the government is awaiting response from the Saudi prince for striking the final deal on Rupali Bank.
"The IMF is for a fresh start on the Rupali issue," said MoF Additional Secretary ATM Fazlul Karim.
The MoF, meanwhile, informed its position saying that it will wait until November 30 before adopting a new strategy for divesting the largely state-owned commercial bank, he added.
Saudi Prince Bandar Bin Mohammad Bin Abdul Rahman Al Saudi won the bid to take over 67.5 per cent shares of the bank at US$ 330 million after the immediate past political regime took the initiative to sell majority shares of Rupali bank as per agreement with the IMF in 2004.
The remaining 26 per cent government shares of the bank would also be sold to the same buyer at $134 million, according to a decision taken early this year.
Since then a number of deadlines for handing over the bank elapsed without concrete response from the Saudi Prince. The delay disappointed the Privatise Commission (PC), which was assigned to complete the disinvestment process.
Although the Saudi Prince's office sent 41 tonnes of dates as gift during the month of holy Ramadan to show its continued interest in taking over the bank, but the PC needed written commitment.
The PC officials alleged that the Saudi Prince office became unpredictable on Rupali that also influenced its price in the share market.
The stock exchange authority was forced to suspend trading of Rupali bank shares for at least one hour last week after the price of each share jumped by more than Tk 1700 in a single day.
A senior MoF official said the caretaker government may wait to get positive response from the Saudi prince even after the November 30 deadline due to some technical reasons including the relationship between the country and the Kingdom of Saudi Arabia (KSA).
Besides, the official pointed out that MoF had not reflected the Rupali sell-off proceeds in the current fiscal budget. This suggested that the government can wait until the end of this fiscal, he added.