Dhaka:Bangladesh Bank has announced a relaxation of regulations concerning the issuance of preference shares and related financial activities for non-resident investors in Bangladeshi companies.
According to United News of Bangladesh, the Foreign Exchange Investment Department (FEID) of the central bank issued a circular on Tuesday, detailing the updated procedures for issuing companies, non-resident investors, and authorised dealer (AD) banks.
The new guidelines permit Bangladeshi companies to issue preference shares to non-resident investors with a dividend rate of up to 5 percent without needing prior approval from Bangladesh Bank. Companies must, however, submit a report to the FEID following the issuance. Should a company wish to issue preference shares with a dividend rate exceeding 5 percent, it must seek prior approval from the central bank, providing justification for the higher rate.
Furthermore, the circular clarifies that no prior permission from Bangladesh Bank is necessary for the repatriation of dividends earned on preference shares or the redemption of such shares by non-resident investors. It also provides guidelines for converting preference shares into ordinary shares and standardizes the reporting and transaction management processes.