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Sunday, February 05, 2006

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HEADLINE
 
Rupali privatisation to pick up steam
AZM Anas
2/5/2006
 

          The government is likely to expedite the Rupali Bank privatization process following the disbursement of the final tranche of the poverty reduction growth facility (PRGF) credit by the International Monetary Fund (IMF) Friday last.
While disbursing the tranche worth US$97.2 million, it has reminded the government of the need for "successful divestment" of the Rupali Bank.
"The successful divestment of Rupali Bank will help improve market sentiment and facilitate the implementation of the entire bank restructuring programme," the IMF said while releasing the concessional fund.
As part of its continued pressure, the IMF's local mission is expected to sit with the Privatisation Commission (PC) today (Sunday) to review the progress in this respect, official sources said. The officials of the two agencies will discuss the preparations with regard to the arranging the Road Show for the Rupali Bank in February in five countries intended to entice potential investors, sources added.
"We'll brief the IMF about the Road Show and its progress," an official source told the FE.
The show will be taking place in Kuala Lumpur, Mumbai, Karachi, Dubai and London. The PC is now pushing ahead with a plan to offload 67 percent share of the Rupali Bank by March, said sources.
During the Road Show, officials and trade envoys will respond to the queries of foreign buyers about the current state of Rupali Bank and furnish details on the privatisation process, said sources in the PC.
Diplomatic missions of Bangladesh situated in the five countries will organise one-to-one meeting. The prospective buyers would be briefed about the investment incentives while the show will be on progress, it is learnt.
A four-member country delegation comprising officials from the PC and the finance ministry is likely to visit the countries.
The government has set aside around Tk 3.0 million to meet the costs to be involved in organising the Road Show, according PC sources.
Meantime, the government has sought expression of interest (EoI) from potential local and foreign buyers to buy the major stake of the bank. The last date for submitting the EoI is February 28.
Advocates of the privatisation say if privatised, it would help cut the bloated volume of losses and non-performing loans of Rupali.
But opponents say the government move is aimed at fulfilling the condition of the multilateral donor in exchange for a credit line. The move has already elicited sharp reaction from the employees and left-leaning parties. Even, the government was forced to delay the process as the issue rolled onto the court yard.
"Despite some improvements, the continued poor financial condition of the NCBs underlines the urgency for decisive actions in this area. The implementation of the bank-by-bank resolution strategies will require strong political support, close monitoring, and technical assistance", the IMF said in its document.
Earlier, the IMF assured the government of attracting a strategic partner or investor for the bank if the government provided adequate funds to meet the capital shortfall.

 

 
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