BSEC taps BB to push for listing five banks

The Bangladesh Securities and Exchange Commission (BSEC) has written to the Bangladesh Bank for pushing the five new banks to go public.

The banks are – Meghna Bank, Midland Bank, Modhumati Bank, NRB Bank, and Shimanto Bank.

In a letter signed by BSEC Executive Director Md Rezaul Karim on Thursday, the stock market regulator requested Bangladesh Bank Governor Fazle Kabir to direct the banks to offload shares as per their commitment.

The managing directors and chief executive officers of the banks were also notified in this regard.

According to the banks’ letter of intent, they are committed to offload shares equal to their entrepreneur capital through initial public offerings (IPO) within three years of their inception.

The Shimanto Bank started commercial operation in 2016 and the remaining four in 2013. But they did not take step to go public as per their commitment. The letter requested the central bank to take step in this regard and notify the BSEC.

Earlier, the central bank repeatedly extended the timeframe for the non-listed banks to enter the capital market.

Recently, NRBC Bank, Union Bank, and South Bangla Agriculture and Commerce Bank Limited have been listed on the bourses.

Apart from that, Midland and Global Islami Bank (formerly NRB Global) have applied to the BSEC for IPO approval.

There is a provision that does not allow opening of new branches if a fourth-generation bank does not comply with the condition of getting listed in the capital market within three years of the commencement of its operations.

But the five banks did not have to face such a situation as they got extension of time through the central bank.

However, the concerned department of Bangladesh Bank could not say the duration of the extended timeframe.

Confirming the time extension, Serajul Islam, an executive director of the central bank and its spokesperson, said that the central bank would not force the fourth generation banks to be listed in the capital market considering the market situation and the financial condition of the banks. He added that if you cannot bring good shares to the market, the market will suffer.

When contacted, Managing Director of Meghna Bank Sohail RK Hussain told The Business Post that they were preparing to enter the market and would apply for an IPO later this year.

He added that the “board of directors has already given its approval to enter the capital market to raise capital.”

The NRB Bank authorities also came up with the same remark. Mamoon Mahmood Shah, its managing director, expressed optimism that they would apply for an IPO within the current year.

At present, 33 banks are listed in the capital market. There are 61 commercial banks in the country, both public and private. Citizen Bank, which is licensed as the 61st bank, has not started operations yet.