Three listed banks' paid-up capital written down to zero

Bangladesh Bank, through a special order, devalued the paid-up capital of three listed banks to zero and cancelled all rights of their shareholders, while the capital market watchdog still expects remedies for investors.

According to a Dhaka Stock Exchange (DSE) filing on Wednesday, Bangladesh Bank, under the Bank Resolution Ordinance 2025, declared Global Islami Bank, First Security Islami Bank and Export Import (Exim) Bank of Bangladesh as having zero paid-up capital from November 5 this year.

Earlier, the interim government decided to merge five private commercial banks into a single entity to protect depositors. The government also extended fund support to prevent the banks from bankruptcy, as they had been suffering from acute liquidity crises due to scams and frauds committed during the previous regime.

However, compensating investors is not part of the merger plan. Although the banks' sponsor-directors engaged in scams and financial frauds, taking advantage of their allegiance to those in power, general investors remained in the dark and are now seeing their investments disappear.

Amid public outrage, the central bank earlier said it had no objection if the government compensated general shareholders.

In the latest disclosure, however, Bangladesh Bank said all shares issued by the banks "stand fully written down and cancelled, and all associated shareholders' rights, including voting, dividends, claims or remedies, are extinguished."

The central bank also said, "No approval or consent of shareholders, creditors, regulators, stock exchanges or any other person shall be required for the validity of this order."

However, the spokesperson of the Bangladesh Securities and Exchange Commission (BSEC), Md Abul Kalam, told The FE that he still believes compensating small investors is both possible and necessary.

He also said the BSEC is ready to take the required steps to facilitate the compensation process.

"The companies are there and not liquidated. They have assets and will continue business in the merged entity. Investors must be compensated. Either the government should give them money or they can be given shares of the merged entity."

First Security Islami Bank had Tk 12.08 billion in paid-up capital, Export Import (Exim) Bank of Bangladesh had Tk 14.48 billion, and Global Islami Bank had Tk 9.87 billion.

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