BB declines to take over Rupali Bank privatisation
Bangladesh Bank (BB) has declined to discharge the responsibility of privatising the state-run Rupali Bank Limited (RBL) after the bank's proposed sale to a Saudi buyer was scrapped, BB sources said.
The Ministry of Finance has recently asked the central bank to takeover the charge of the RBL following suggestions from the International Monetary Fund (IMF).
Inspired by the successful sale of the majority shares of the once scandal-ridden Oriental Bank Limited to a Malaysia-based financial group, the government wanted the central bank to do it.
“RBL's sale or privatisation is a tough and time-consuming job for the BB due to the Rupali's size and business activities,” a senior BB official said.
The official said Oriental Bank's handover to a new buyer was comparatively easier because Oriental is a small private bank.
Authorised and paid-up capital of the RBL is Tk 700 crore and Tk 125 crore respectively. The bank's deposit was Tk 7,280 crore and loans and advances Tk 4,708 crore at the end of 2007.
It has 492 branches and some 4,430 staffs.
Whereas Oriental Bank's authorised and paid-up capital are Tk 200 crore and Tk 51.9 crore respectively. It has 692 staffs and 30 branches.
RBL is the only state-owned bank listed on the Dhaka and Chittagong stock exchanges. Currently, the government holds 93.26 percent shares in the bank.
The government started the RBL privatisation process in May 2005 under a World Bank-funded bank modernisation project.
After road shows in Dubai, Singapore, Kuala Lumpur, Delhi and London, the Privatisation Commission in 2006 floated tender for the sale of the bank. Of the short-listed bidders, Prince Bandar Bin Mohammad Bin Abdul Rahman Al Saud of Saudi Arabia had won the bidding at his offered price of $330 million for 67.26 percent shares of the bank. Later, the prince was awarded the remaining 26 percent government-held stakes at $128 million in February 2007.
Since then the prince was dilly-dallying to take over the bank and earlier this year he had offered only $185 million instead of his earlier $458 million offer for 93.26 percent shares.
The government was forced to scrap the proposed sale of the bank to the Saudi buyer in the first week of March this year. IMF suggested the government handover the bank to the BB for privatisation.
“BB is yet to respond to the government's proposal on the RBL,” a finance ministry official said, adding that the RBL would continue to work as a state-run commercial bank until a new decision is taken.
When asked, Abdul Hamid Miah, managing director of RBL, however said he is not aware of the central bank and government moves on the bank.
“We have been allowed in March this year to run the normal business activities of the bank after a BB embargo for over two years goes,” Abdul Hamid said. “We have revived the bank's loans and advances, which are growing now,” he added.
Up to March 2008, the bank had classified loans amounting to Tk 1,830 crore. Of the amount, some 20 big borrowers constitute over 60 percent.