As per section 14Kha of sub-section (1) of the Bank-Company Act, 1991 (Amended up to 2013) a person or institution or company, acting directly or indirectly, alone or in concert with another person, holding more than five percent of the equity interest in a bank-company requires prior approval from the Bangladesh Bank. Banks are advised to abide by the following instructions in order to comply with the aforesaid provision of the Act:
- The Form-1 attached herewith is to be used by the intending Significant Shareholder(s) to seek prior approval of Bangladesh Bank under section 14Kha of the Bank Company Act, 1991. All applicable parts of the Form must be completed. If there is insufficient space for answers, appropriately marked attachment(s) may be included.
- For individuals, the Form containing the information and contact details of the intending Significant Shareholder must be completed and signed by that person; for institution or company a person duly authorized by it may fill out the Form. In such case, the Bank-company should maintain records of information furnished to it regarding such authorization.
- Upon its completion by the intending Significant Shareholder, the Form together with continuation sheets for additional information, if any, should be sent to the concerned Bank-company. The Bank-company will transcribe the information contained in the Form and their respective continuation sheets, if any, to Bangladesh Bank for approval.
- A bank-company/institution providing custodial services does not require prior approval of Bangladesh Bank even if its collective shareholdings on behalf of customers exceeds five percent of the shares of a bank-company. However, if any single customer wants to hold more than five per cent shares of a bank-company, prior approval from Bangladesh Bank has to be obtained.
- For significant shareholder(s) of a banking company existing immediately before the issuance of this circular, approval of Bangladesh Bank is not required. However, detailed information about such shareholders in Form-2 has to be submitted to this department within the next one month.
This circular is issued with immediate effect.