The government may consider compensating general investors affected by the merger of five troubled Islamic banks, said Bangladesh Bank executive director and spokesperson Arif Hossain Khan.
Talking to reporters at Bangladesh Bank's head office on Monday (November 10), he also said that if small and affected investors apply to the government, their situation may be considered within the government's capacity.
He further said that the government understood the concerns of small investors investing in these banks through the stock market.
Decision-makers can consider the issue from a humanitarian perspective, which can be a compassionate step beyond the limits of conventional accounting rules.
The Bangladesh Bank spokesperson also said that the complex and multi-tiered regulatory process to establish a new bank by merging the five troubled Islamic banks has already begun.
"The government sent a proposal to Bangladesh Bank in March to form an Islamic bank by merging these five banks. Bangladesh Bank has agreed to the proposal."
Khan said the new bank will officially start operations only after all legal procedures are completed.
He explained: “The government, as the applicant, will first apply to the Registrar of Joint Stock Companies and Firms (RJSC) to form the new company. This application will have to mention the details of the board of directors and share structure.”
After getting approval from the RJSC, the new entity will have to apply to Bangladesh Bank for recognition or approval as a banking company under the Banking Companies Act.
The formal operations of the new bank will start only after Bangladesh Bank gives the necessary approval, the spokesperson added.