Two decades after its formation, Ansar-VDP Unnayan Bank has moved to restructure its ownership, mainly due to a lack of enthusiasm among the Ansar and VDP members in buying the bank's shares.
The management of the non-scheduled specialised bank recently sought a hike in the government's stake in the bank, to 75 percent from 25 percent now.
The move will make just 25 percent of shares available for the Ansar and VDP members, as outlined in a recent proposal sent by the bank to the finance ministry.
“We have failed to attract them (Ansar and VDP members) to buy the bank's shares. So, the only alternative left is to request the government to invest more in the bank,” Mohammad Shams-Ul Islam, managing director of the bank, told The Daily Star.
Otherwise, the bank will continue to face a capital shortage, he added.
Bangladesh Ansar & VDP (Village Defence Party) is a government organisation to protect any kind of public and private property.
Before the proposal, the government had made a fresh injection of Tk 25 crore, taking its total investment in the bank to Tk 50 crore, Islam said.
The government had established Ansar-VDP Unnayan Bank under a special law in 1995, with 25 percent state-owned shares and the rest available for Ansar and VDP members. The bank began operations in 1996.
Of the Tk 100 crore in issued capital, the government paid Tk 25 crore for its stake. But the Ansar-VDP members have so far paid only Tk 30.22 crore, instead of Tk 75 crore.
At present, there are 60 lakh Ansar and VDP members in Bangladesh. A member can buy up to 10 shares worth Tk 100 each. In the last two decades, around 25.58 lakh members bought shares of the bank.
“Members who bought shares did so to get loans. They are not interested in investing even Tk 100,” said Muin Uddin, the bank's general manager for administration.
“We recently borrowed Tk 100 crore from the central bank to meet our capital deficit.”
Bangladesh Bank gave another Tk 15 crore under a refinance scheme, he added.
Ansar-VDP Unnayan Bank has been profitable since 2001-2002. It made more than Tk 15 crore in profit in 2014-15, up from Tk 10.5 crore a year ago.
The bank's nonperforming loans are less than 5 percent of its total loans, much below the banking industry's average NPL of around 11 percent. Its loan recovery rate is nearly 98 percent. The bank celebrated its 20th founding anniversary at a programme in Dhaka yesterday.