Govt may consider compensating small shareholders: BB

There is no scope to protect the interests of general investors or shareholders in the merger of the five troubled banks under the Bank Resolution Ordinance, 2025. However, the government may consider compensating small investors and shareholders, the Bangladesh Bank said in a statement.

At a press conference on Wednesday, central bank Governor Ahsan H. Mansur said the shareholders of the five banks will not receive any shares in the new bank, as the value of assets tied to their existing shareholdings is already negative.

The governor's remarks sparked anger and unease among investors and shareholders, with some even threatening to stage protests.

In a statement yesterday, the central bank said the Bank Resolution Ordinance, 2025, was enacted in line with international best practices and taking into account the technical assistance and recommendations of the International Monetary Fund, the World Bank, and the Foreign, Commonwealth and Development Office.

The ordinance clearly specifies the rights of depositors, shareholders, and other creditors in banks brought under resolution, it added.

The statement also noted that after the completion of the resolution process, if any compensation is found payable to shareholders based on an assessment conducted by an independent professional valuer appointed by Bangladesh Bank, such compensation may be provided.

However, analyses of information obtained from the Asset Quality Review and special inspections conducted by an international consulting firm revealed that the said banks have incurred huge losses and their net asset value is negative.

In this context, at a recent meeting of the Banking Sector Crisis Management Committee (BCMC), formed under Section 42 of the Ordinance and held at Bangladesh Bank, it was decided that "the shareholders of the five distressed banks shall bear the losses of the banks under the resolution process."

Considering the relevant provisions of the Bank Resolution Ordinance, 2025, and the BCMC's decision, there is currently no scope to protect the interests of general investors or shareholders in the merger of the five banks, said the BB.