Compensation for affected Islami bank shareholders under review: Finance adviser
Business Report :
Finance Adviser Salehuddin Ahmed yesterday said the government will consider compensating affected shareholders of the five merged Islamic banks, although the process will be complex and require careful, step-by-step calculations.
Speaking at the Secretariat after a meeting of the Advisory Council Committee on Government Purchase on Tuesday, Salehuddin said careful calculation and gradual execution would be required due to “technical challenges”.
Responding to queries about earlier assurances on compensation, he said the priority remains depositors. Yes, the matter of the shareholders will be considered. Why is Tk 42,000 crore being given to these banks? First, all depositors will receive their money.
Later, the matter of the shareholders will be looked into, he said. He described compensation as a technical issue because the Net Asset Value (NAV) of most of the banks has turned negative.
Work is ongoing to determine the method of compensation, he said, noting that detailed modelling is required. When the financial condition of a bank becomes negative, it is not logical to impose the entire liability unilaterally on the shareholders, he said, adding that future policy decisions will depend on further calculations.
In response to a question about whether shareholders could receive shares in the Sammilito Islami Bank, he said a model has yet to be finalised. How it will be done is being worked on. The next finance minister will ensure the process.
When the banks’ financial position turns negative, placing the full burden on shareholders is not reasonable. On whether affected shareholders will receive a portion of shares in Sammilito Islami Bank, he said: It will take some time to design the model. For example, someone who bought a large number of shares may receive partial shares and the rest as compensation.
“Calculations are needed because the full burden cannot fall on shareholders. Options under consideration include partial share allocation combined with other forms of compensation, depending on individual investment values.
Speaking on broader banking reforms, Salehuddin said structural problems cannot be resolved through one-off decisions and require continuous policy action. Strengthening regulatory capacity and restoring market confidence remain key priorities, he said.
Salehuddin also said long-term economic stability would remain elusive without strengthening the stock market and bond market, warning that businesses would continue to rely heavily on banks in the absence of equity participation and a functional bond market.
The finance adviser expressed optimism that ongoing reform initiatives, if continued by future governments, could help restore stability in both the banking sector and the wider economy.