BB approves sale of 51pc GSP Finance shares to BRAC Bank
Siddique Islam | Tuesday, 22 July 2008
The Bangladesh Bank (BB) has given opinion to the Ministry of Finance in favour of selling of 51 per cent shares of the GSP Finance, a financial institution, to BRAC Bank Limited, officials said.
The ministry earlier asked the central bank to provide information about the draft Memorandum of Understanding (MoU) signed between the GSP Finance and BRAC Bank Limited, the price of shares and the reasons for non-floatation of shares by GSP.
"We have already submitted our report providing such information to the ministry," a BB senior official told the FE Monday, adding that the central bank wants the GSP Finance become a viable entity with strong financial base.
"We have no objection if the concerned parties have no legal problem in this connection," another BB official said, adding that the central bank has sought exemption of the existing rule and regulation from the ministry to transfer shares between the two financial institutions.
The officials, however, said the fate of such deal will depend on the ministry's decision.
"We want a leasing arm to promote the small and medium enterprises (SMEs) across the country," Chairman of the BRAC Bank Limited Muhammad A (Rumee) Ali told the FE on the day.
He also said the BRAC Bank has also planned to finance projects in light engineering sector through the leasing company.
"We are hopeful about exemption of such rule and regulation by the authorities concerned for allowing purchase of the shares," Rumme Ali added.
On May 8 last, the board of directors of BRAC Bank Ltd decided in principle (subject to the necessary regulatory approval) to acquire 1,946,500 shares of GSP Finance.
A memorandum of understanding has already been signed between BRAC Bank and GSP Finance.
The total number of GSP shares will stand at 3,816,500 after the paid-up capital is raised through issuance of 1,946,500 shares.
The BRAC Bank agreed in principle to acquire 1,946,500 shares, which will be 51 per cent of the post-issue paid-up share capital of the company, where local and foreign stakes are involved.
After signing the MoU, the BRAC Bank has appealed the central bank for exemption of a certain section of the existing Bank Company Act that will allow purchase of the shares.
The GSP Finance Company (Bangladesh) Limited (GSPB) was incorporated in Bangladesh on 29th October 1995 with the Registrar of Joint Stock Companies and Firms.
It started its commercial operation on April 17, 1996 under licence granted by the BB in accordance with the Financial Institutions Act of 1993.
The ministry earlier asked the central bank to provide information about the draft Memorandum of Understanding (MoU) signed between the GSP Finance and BRAC Bank Limited, the price of shares and the reasons for non-floatation of shares by GSP.
"We have already submitted our report providing such information to the ministry," a BB senior official told the FE Monday, adding that the central bank wants the GSP Finance become a viable entity with strong financial base.
"We have no objection if the concerned parties have no legal problem in this connection," another BB official said, adding that the central bank has sought exemption of the existing rule and regulation from the ministry to transfer shares between the two financial institutions.
The officials, however, said the fate of such deal will depend on the ministry's decision.
"We want a leasing arm to promote the small and medium enterprises (SMEs) across the country," Chairman of the BRAC Bank Limited Muhammad A (Rumee) Ali told the FE on the day.
He also said the BRAC Bank has also planned to finance projects in light engineering sector through the leasing company.
"We are hopeful about exemption of such rule and regulation by the authorities concerned for allowing purchase of the shares," Rumme Ali added.
On May 8 last, the board of directors of BRAC Bank Ltd decided in principle (subject to the necessary regulatory approval) to acquire 1,946,500 shares of GSP Finance.
A memorandum of understanding has already been signed between BRAC Bank and GSP Finance.
The total number of GSP shares will stand at 3,816,500 after the paid-up capital is raised through issuance of 1,946,500 shares.
The BRAC Bank agreed in principle to acquire 1,946,500 shares, which will be 51 per cent of the post-issue paid-up share capital of the company, where local and foreign stakes are involved.
After signing the MoU, the BRAC Bank has appealed the central bank for exemption of a certain section of the existing Bank Company Act that will allow purchase of the shares.
The GSP Finance Company (Bangladesh) Limited (GSPB) was incorporated in Bangladesh on 29th October 1995 with the Registrar of Joint Stock Companies and Firms.
It started its commercial operation on April 17, 1996 under licence granted by the BB in accordance with the Financial Institutions Act of 1993.