Executive Director and Spokesperson of Bangladesh Bank (BB) Arif Hossain Khan on Monday said that the government may consider compensating general investors who have been affected by the merger of five troubled Islamic banks.
“If small, affected investors approach the government with an application, there is an expectation that the government may address their situation according to its capacity,” he said while talking with reporters at his BB headquarters in the city.
Responding to a question on concerns of small investors, the spokesperson acknowledged the worries of those who have invested in the affected banks through the share market.
Decision-makers involved in the process may consider addressing this issue from a humanitarian perspective, potentially rising above conventional accounting procedures, he added.
Arif Hossain Khan, however, provided details regarding the complex, multi-stage regulatory process now underway for the proposed merger. The overarching plan involves consolidating five troubled banks into a single Islamic bank, he added.
“The process began when the government submitted a letter of interest to Bangladesh Bank regarding the plan, initially proposed in March, to consolidate five banks into a single Islamic bank. Bangladesh Bank has granted its consent to this proposal,” he added.
The spokesperson clarified that the formal commencement of the new entity is contingent upon strict adherence to established legal procedures.
“The government, as the applicant, must first apply to the Registrar of Joint Stock Companies and Firms (RJSC) to formally form a company. This application will need to detail aspects such as board formation and shareholding structure,” he added.
Upon receiving approval for company formation from the RJSC, he said, the company must then approach Bangladesh Bank.
The new entity must apply to the central bank for authorisation to be converted into, or recognised as, a bank company under the stipulations of the Bank Company Act, he added.
He mentioned that the formal operations of the new bank will only commence, starting from a principal office, after Bangladesh Bank receives this necessary application and grants the final authorisation.
