With the amendment of the Bank Resolution Ordinance and its passage as a law in the National Parliament, a new discussion has begun on the ownership structure of the country’s five merged weak banks. Under the amended law, previous shareholders may get the opportunity to return to the ownership of the banks, subject to meeting certain conditions, according to relevant sources.
The ordinance, issued to maintain financial sector stability during the interim period, aimed to restructure weak banks and protect the interests of depositors. However, recent amendments to the law have taken ownership restructuring to a new level.
Bangladesh Bank officials said that this opportunity is not open to everyone. Directors or investors who have been accused of irregularities, loan fraud or financial corruption will not be allowed to return to bank management. Rather, this opportunity will be applicable only to transparent and acceptable investors.
According to the new provisions, old shareholders will be able to apply to return to ownership if they can repay a portion—about seven and a half percent—of the money spent by the government and the central bank on the restructuring of the merged bank.
However, a large section of analysts have questioned this provision. According to them, reinstating those whose decisions and actions in the past have put the banking sector in crisis is not ethically acceptable and could pose a risk to financial discipline.
Banking experts also believe that this condition will not be easy to meet in practice. As a result, even if there is a legal opportunity, in practice it may be difficult for many to return to ownership.