Bangladesh Bank (BB) on Thursday said that shareholders of five troubled banks will get compensations under the Bank Resolution Ordinance, 2025 (BRO 2025).
“According to Section 40 of the BRO, 2025, if a scheduled bank under resolution is ultimately liquidated, and shareholders suffer greater losses through the resolution process than they would have incurred through liquidation, they shall be paid compensation equal to the difference in the amount of loss,” said a BB press release.
This compensation entitlement will be determined based on a valuation performed by an independent professional valuator appointed by Bangladesh Bank, after the resolution process is completed.
Furthermore, it is noted that the government may consider providing compensation specifically to protect the interests of small investors or shareholders.
The Bank Resolution Ordinance, 2025, was enacted consistent with international best practices, incorporating technical assistance and opinions derived from the International Monetary Fund (IMF), the World Bank, and the OECD.
The ordinance clearly specifies the rights of various claimants in banks under resolution, including depositors and shareholders.
Analysis of data obtained from special inspections and work conducted by the international consulting firm Equator revealed that the banks currently under resolution are facing huge losses and possess a negative Net Asset Value (NAV).
In light of this financial status, the Banking Sector Crisis Management Committee (BCMC), constituted under Section 42 of the BRO, 2025, convened a meeting on September 24, 2025.
A decision was formally adopted stating that the shareholders of the five distressed banks must bear the burden of the banks' losses during the resolution process.
Consistent with the resolution tools framework, Sections 16(2)(U), 28(5), 37(2)(M), and 38(2) of the BRO, 2025, empower Bangladesh Bank to impose losses on multiple categories of holders within a scheduled bank under resolution.
These categories are shareholders, liable individuals, additional Tier 1 (AT1) capital holders, tier 2 capital holders and subordinated debt holders (excluding Tier 2 capital holders).
In the current context of the merger of these five banks, and considering the relevant sections of the BRO, 2025, and the BCMC’s recent decision, there is currently no scope to consider the protection of the interests of general investors or shareholders.
Courtesy: BSS
Bd-pratidin English/Lutful Hoque
