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Dhaka: The army-backed interim government of Bangladesh said yesterday it had scrapped a deal to sell a state-run bank for $330 million to a Saudi prince, saying conditions of the sale had not been met.
Prince Bandar Bin Mohammad Bin Abdul Rahman Al Saud signed the deal with the Privatisation Commission of Bangladesh in August 2006 to buy a 67 per cent stake in Rupali Bank Ltd, the smallest of the country's four state-run commercial banks.
"We have decided to cancel the deal with the prince as he did not pay the money in accordance with the conditions and now the commission will take necessary action," said A.B. Mirza Azizul Islam, the adviser for finance and planning in the commission.
Following suggestions from the World Bank and International Monetary Fund, Bangladesh had agreed to sell the 67 per cent stake in Rupali Bank to the Saudi prince at more than three times the size of the next highest bid, a senior government official said yesterday.
The state privatisation commission will issue a fresh tender for bids for the stake as soon as possible, an official of the finance ministry said.
Rupali Bank has 493 branches and 5,731 staff. It posted a net profit of 163 million taka in January-June on turnover of 857.5 million taka. It had classified loans of about 17 billion taka this year, which is 36 per cent of the bank's total outstanding loans.
The government wants to retain a 27 per cent stake, with another 6 per cent held by investors.
"As per conditions set in the selling agreement, there is no bar in scrapping the deal as they violated the terms and conditions of the agreement," Azizul told reporters after a meeting of government advisory committee on economic affairs.
A commission official said that the Saudi prince was not found to be interested in purchasing the bank.
We have decided to cancel the deal with the prince as he did not pay the money in accordance with the conditions and now the commission will take necessary action."
A.B. Mirza Azizul Islam
Adviser for finance and planning in Privatisation Commission of Bangladesh
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