Govt assurance raises hopes of general shareholders in Islamic bank merger

A government announcement concerning shareholders of the five troubled Islamic banks being merged has raised hopes among general shareholders.
"The matter of protecting investors' interests is being carefully examined in the merger process," reads an official statement issued by the Ministry of Finance on Monday.
Though the press release did not explicitly mention general investors, such an assurance has long been sought after by retail or small investors. The assurance came from the ministry for the first time against the backdrop of speculations and fears that retail investors would get nothing post-merger.
"This is good news for retail investors, and we welcome the decision - though it could have been announced earlier," said Saiful Islam, president of the DSE Brokers Association of Bangladesh (DBA), in a telephone conversation with The Financial Express.
The ministry has dismissed the speculations as "baseless rumours" being spread on social media.
"A vested quarter has been deliberately spreading such misinformation, but no government decision has been taken to harm investors' interests," the statement added.
The ministry did not provide details on how or when shareholders would get their investments back and whether all shareholders should be expecting some sort of remedy from the merger process.
However, sponsor-directors are particularly the ones responsible for the misery of the banks.
Earlier, the Bangladesh Securities and Exchange Commission (BSEC) urged the central bank in a letter to ensure the protection of general investors in the Islamic banks.
The letter was recently sent to the governor of the central bank, reports UNB.
While announcing the merger of the five private banks suffering from liquidity crises, the central bank publicly assured protection of depositors' money, but the matter of general or small investors remained unaddressed.
The interim government has recently approved the merger of the financially struggling Shariah-based banks - First Security Islami Bank, Global Islami Bank, Union Bank, EXIM Bank, and Social Islami Bank - into a single entity.
The merged entity will initially have an authorised capital of Tk 400 billion, with paid-up capital estimated at Tk 350 billion.
Two names have been proposed for the new bank: United Islamic Bank and Sammilito Islamic Bank.

farhan.fardaus@gmail.com