Bangladesh Bank, it seems, may walk back on its bold move on May 12 to bar listed banks from giving cash dividends to both sponsors and investors until September to boost their capacity to absorb the strain on their capital base from the ongoing economic dire straits.
The decision turned out to be wholly unpopular with general investors, who have been hit hard by the continued slide of the bourse.
Subsequently, in a meeting yesterday between the Bangladesh Securities and Exchange Commission and BB Governor Fazle Kabir, it was decided that banks might be allowed to give dividends to their general shareholders after all.
"We stepped in to give the small investors some relief," Shibli Rubayat Ul Islam, the newly appointed chairman of the Bangladesh Securities and Exchange Commission, told journalists after the meeting.
The central bank may issue a notice soon that will allow the listed banks to distribute dividends only among general investors and not institutional investors and sponsors, Islam said.
"Bangladesh Bank and the BSEC will work together to fight coronavirus and develop the capital market. We met the central bank to work for the betterment of the economy where we talked to find the way out to help the economy after the pandemic."
The two regulators will appoint two officials from both sides who will work intensively towards fighting any liquidity shortage prompted by the pandemic, he said, adding that they would meet every month and take timely decisions.
"We are ready to help the banking sector if they need the stock market to implement incentive packages of the prime minister," the chairman said.
Commissioners Shaikh Shamsuddin Ahmed and Khondoker Kamaluzzaman were also present at the meeting.