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B'desh bank sold to Saudi prince; SBI unsuccessful

Rupali Bank, the second largest state-owned bank, has been sold to Saudi Prince paving way for hiving off stakes in three other such banks.

india Updated: Feb 07, 2007 14:42 IST

Bangladesh is to sell its entire share of Rupali Bank, the second largest state-owned bank, to Saudi Prince Bandar, paving the way for hiving off stakes in three other such banks that have dominated the country's economy.

India's state-owned State Bank of India (SBI) had bid for Rupali, but was unsuccessful.

The Khaleda Zia government, which completed its term in December last year, had decided to keep on hold most Indian investment offers and projects, considering them "politically sensitive".

The largest Indian investment, the Tatas $3 billion proposed investment in energy, fertilizer and infrastructure, was held in abeyance to be decided after the elections, which were called off last month.

The new date for elections have not yet been announced by the caretaker government.

The Zia government had sold 67 percent of Rupali Bank to the Saudi prince for an estimated $330 million last year.

On Monday, the caretaker government decided to off-load the remaining 26 percent. The decision, taken by the Advisors' Committee on Economic Affairs, is expected to yield an additional $143 million, New Age newspaper said.

Quoting the Privatisation Commission proposal, the Daily Star newspaper said that Prince Bandar was given the nod because his offer of $128 million was considered the highest.

Despite the purchase last year, the Saudi firm has not yet been handed over control of the bank. Processing of the deal will now follow.

Finance Advisor Mirza Azizul Islam said bids would be invited for the remaining stakes.

The World Bank and the International Monetary Fund (IMF) have pushed for the privatisation of three other state-owned banks - Sonali, Janata and Agrani.

The caretaker government headed by Fakhruddin Ahmed, a banker himself, turned them into corporations last Saturday paving the way for offloading their equity shares.

First Published: Feb 06, 2007 14:55 IST