Dhaka: Bangladesh Bank (BB) today announced that shareholders of five troubled banks will be compensated under the Bank Resolution Ordinance, 2025 (BRO 2025).
According to Bangladesh Sangbad Sangstha, the ordinance stipulates that if a bank under resolution is ultimately liquidated and shareholders face greater losses through the resolution process than they would through liquidation, they are entitled to compensation for the difference in losses. This measure is outlined in Section 40 of the BRO, 2025.
The compensation will be determined through a valuation conducted by an independent professional valuator appointed by Bangladesh Bank, following the completion of the resolution process. The government may also provide compensation to protect the interests of small investors or shareholders.
The Bank Resolution Ordinance, 2025, aligns with international best practices and incorporates insights from the International Monetary Fund (IMF), the World Bank, and the OECD. It defines the rights of various claimants in banks under resolution, including both depositors and shareholders.
An analysis conducted by the international consulting firm Equator, based on data from special inspections, revealed that the banks currently under resolution are experiencing significant losses and possess a negative Net Asset Value (NAV). The Banking Sector Crisis Management Committee (BCMC), formed under Section 42 of the BRO, 2025, held a meeting on September 24, 2025, and decided that shareholders of the distressed banks must bear the losses during the resolution process.
Under the resolution tools framework, specific sections of the BRO, 2025, empower Bangladesh Bank to impose losses on various holders within a scheduled bank under resolution. These include shareholders, liable individuals, additional Tier 1 (AT1) capital holders, tier 2 capital holders, and subordinated debt holders, excluding Tier 2 capital holders.
Given the current context of the merger of these five banks, and in view of the relevant sections of the BRO, 2025, and the recent decision by the BCMC, there is no provision to consider the protection of the interests of general investors or shareholders at this time.