Owners oppose proposed amendments of Bank Co Act 

Business Report:

An initiative to impose limits on the shareholding of individuals, family members and various institutions in bank companies has faced strong opposition from bank owners. In the draft amendments, Bangladesh Bank has proposed that no individual, family member or institution—directly or indirectly—may hold more than 5 percent shares in multiple banks simultaneously.

Considering recent negative experiences in the banking sector, the central bank seeks to include this provision to reduce the influence of vested interest groups over bank companies.

Under the draft Bank Company (Amendment) Act 2025, Bangladesh Bank has proposed that no person, family, or institution may directly or indirectly hold more than a 5 percent stake in more than one bank simultaneously.

The Financial Institutions Division (FID) of the Ministry of Finance held a meeting last week, chaired by FID Secretary Nazma Mobarek, to discuss the addition of three new sub-sections to Section 14/B of the law. The primary objective is to prevent vested interest groups from exerting undue influence over multiple financial institutions at once.

Three legislative changes are proposed to achieve the desired result:

If a person or entity owns 2 percent or more of one bank, they cannot hold a similar 2 percent stake in any other bank.

Even if an investor holds more than 5 percent of a bank’s shares, their voting rights will be capped at 5 percent (excluding the government and non-profit/strategic investors).

Current regulations allow an investor to hold up to 10 percent of a bank’s shares with “one share, one vote” rights, and there are no restrictions on holding shares in multiple banks.

The Bangladesh Association of Banks (BAB), representing private bank owners, has strongly opposed the move. BAB representatives argued that general shareholders do not influence policy; rather, the Board of Directors does.