Bangladesh News

After two years of deals and negotiations the Advisory Committee on Economic Affairs yesterday cancelled the process of Rupali Bank sale to Saudi Prince Bandar Bin Mohammed Bin Abdulrahman Al-Saud.

“The process to sell Rupali Bank to the Saudi prince has been cancelled as we didn’t get timely response from him,” Finance Adviser Mirza Azizul Islam told reporters after a meeting of the committee.

The finance adviser who chaired the meeting said the bank’s bidder, Saudi prince, has failed to pay the selling price despite repeated reminders. For this the government dropped Rupali Bank’s name from the privatisation list for the time being.

“The decision has been taken that the Privatisation Commission cancelled the primary deal with the bidder formally and would send back all the files and documents related to Rupali Bank sale to the finance ministry.

“Once it gets back the bank, the finance ministry will decide on its fate,” he said adding that the bank is not going to be privatised for the time being.

Asked about any legal barrier for cancelling the deal with the Saudi prince, he said the law ministry has been consulted in this regard. The ministry has opined that there is no legal barrier at the present stage of the deal.

The process to sell 97 percent shares of the crisis-ridden state-owned bank started two years ago.

Several investors had submitted expressions of interest and the government in February 2007 approved the sale to the prince with an offer of over $458 million.

In December last year, Prince Bandar in a letter to General Moeen U Ahmed, chief of army staff, said he was willing to pay only $185 million instead of the $458 million he had offered earlier.

Ibrahim Khaled, chairman of the Krishi Bank and former deputy governor of Bangladesh Bank, identified three reasons for failure to sell the Ruplai Bank to the bidder.

He said the bidder had quoted an unusual high price for the bank which was not practical. Besides, the local agent of the prince is an international arms trader who didn’t have previous experience to operate any bank or financial institution, he added.

“I think the bidder has some other intention behind going for the Rupali Bank and they stepped back once a new government took office.

“The bidder might have thought that their intention will not be fulfilled under the present government.”

Asked about the future of Ruplai Bank, the leading banker said it is better to involve the central bank, instead of the Privatisation Commission, in the process to privatise it.

He referred to the Oriental Bank and said the central bank has successfully sold out that bank’s shares within a minimum timeframe.

Ibrahim Khaled suggested completing the privatisation process of the Rupali Bank by the tenure of the caretaker government.

“The chief adviser to the present government was governor of the central bank and he has adequate knowledge about banking system of our country,” he observed.