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Central Bank reviews payout for small investors in mergers
Bangladesh Bank on Thursday said under existing law, there is currently ‘no scope’ to directly protect the interests of general investors or shareholders during the merger process of the five banks but government may consider providing compensation to small investors or shareholders.
The debate over the future of small shareholders in five Islamic banks undergoing a government-directed merger deepened on Thursday, following a clarification issued by Bangladesh Bank (BB).
The statement came a day after Governor Ahsan H. Mansur said that the value of all shares in the five banks had effectively dropped to “zero”, sparking controversy.
Mansur reportedly noted that shares with a face value of Tk 10 had fallen to Tk 420 in market terms — leaving investors with nothing.
Bangladesh Bank explained that the Bank Resolution Ordinance, 2025, which governs the merger process, was drafted in line with international best practices and developed with technical assistance from the IMF, World Bank, and FCDO.
The ordinance defines the rights of depositors, shareholders, and other creditors of affected banks.
Notably, Section 40 of the Ordinance allows for compensation if shareholders suffer greater losses under a resolution process than they would have faced through a standard liquidation.
Under this provision, any compensation owed will be determined after the resolution is completed, based on an assessment by an independent professional valuer appointed by Bangladesh Bank, reports UNB.