Govt to consider compensation for shareholders of merged Islamic banks: Finance adviser
Responding to queries about earlier assurances on compensation, he says the priority remains depositors.
The government will consider compensating shareholders affected by the merger of five Islamic banks, though the process will be complex and require careful, step-by-step calculations, said Finance Adviser Salehuddin Ahmed.
He made the remarks today (10 February) while responding to journalists after a meeting of the Advisory Council Committee on Government Purchases at the Secretariat.
Addressing questions about earlier assurances on shareholder compensation, Salehuddin said the government's immediate priority is protecting depositors.
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"Yes, the matter of the shareholders will be considered. Why is Tk42,000 crore being given to these banks? First, all depositors will receive their money. Later, the issue of shareholders will be looked into," he said.
He described compensation as a highly technical issue, noting that the net asset value (NAV) of most of the merged banks has turned negative.
He said experts question whether compensation is justified since shareholders are owners, but added that many may have invested based on market signals and the government is examining what support may be possible.
Work is currently underway to determine the appropriate compensation mechanism, he said, adding that detailed financial modelling will be required.
"When the financial condition of a bank becomes negative, it is not logical to impose the entire liability unilaterally on the shareholders," Salehuddin said, noting that future policy decisions would depend on further calculations.
When asked if shareholders would receive shares in the Sammilito Islamic Bank, he noted that a model is still being finalised. Options under consideration include partial share allocations combined with other forms of compensation, depending on the value of individual investments.
On broader banking sector reforms, the finance adviser said structural weaknesses cannot be addressed through one-off decisions and require continuous policy action.
Strengthening regulatory capacity and restoring market confidence remain key priorities, he said, while also stressing the need to develop the stock and bond markets to reduce long-term dependence on bank financing.
A sustainable economy, he added, requires stronger equity participation and diversified financial instruments.
Salehuddin expressed optimism that ongoing reform initiatives – if continued by future governments – could help restore stability in both the banking sector and the wider economy.
