Government authorities prepare to compensate the small investors in the five distressed private banks merged into Sammilito Islami Bank late last year, officials say.
Instructed by the high-ups of the new government, the Financial Institutions Division (FID) is now calculating how much money needed to compensate the investors who bought shares of the five banks from the stock market, they add.
Officials at the FID have prepared a preliminary list of the small investors who have been affected by the merger of the five banks, which had been extensively looted allegedly during the Awami League regime.
The mode of payment, whether the small investors will be compensated on the prices of shares on the last trading day or at face value, however, is yet to be finalised.
The FID will soon place the matter to Finance and Planning Minister Amir Khosru Mahmud Chowdhury for a decision and take further approval from the top of the government for securing funds to disburse the compensations.
A senior FID official has told The Financial Express they earlier placed the matter to then finance adviser Dr Salehuddin Ahmed, but he left office before giving a final decision.
The official also says soon after assuming office, the new finance and planning minister expressed interest in settling the issue shortly.
In this regard, he asked FID officials to submit a proposal detailing the number of shareholders eligible for compensation and the amount of money to be needed for the payoff.
"We will place the proposal to the minister soon as our paperwork is almost completed," says the official.
A Finance Division official familiar with the developments has told The Financial Express the finance minister is of the opinion that the share value of a company cannot be zero in any way.
He says the finance minister is convinced that the small investors who bought shares of the banks from the stock market had no role in the board of directors and management of the board, and thus, they had no responsibility for the deterioration in the financial health of the banks.
The official says the small investors bought the shares of the banks based on the financial statements, which showed the banks were making profit.
Thus, these small investors are eligible for compensation as the government itself has taken over the banks, the official says, noting that the matter of compensation may be finalised next week.
In November last year, the government formed Sammilito Islami Bank by merging five financially distressed Islamic banks under the Bank Resolution Ordinance 2025.
The five banks are First Security Islami Bank, Social Islami Bank, Global Islami Bank, Union Bank, and EXIM Bank.
The government allocated some Tk 200 billion as capital in favour of Sammilito Islami Bank from the exchequer.
Moreover, the central bank has released some Tk 120 billion from the deposit-insurance trust fund, from where each depositor is given Tk 0.2 million as compensation.
However, the small investors have yet to be given any compensation as then Bangladesh Bank governor Dr Ahsan H Mansur declared the share prices of the merged banks as zero and the stock-market regulator stopped the trading in the shares on the bourses.
syful-islam@outlook.com
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