Publicly listed banks are likely to be allowed to disburse only cash dividend to their general shareholders before September this year.

Bangladesh Bank (BB) Executive Director and spokesperson Md Serajul Islam on Monday told reporters about the development after insistence from the securities regulator in this regard.

BB governor Fazle Kabir and the newly appointed Bangladesh Securities and Exchange Commission (BSEC) chairman Shibli Rubayat Ul Islam held a meeting at BB headquarters in the capital on the day.

At the meeting the BSEC chairman proposed the central bank allow banks to disburse cash dividends only to the shareholders other than sponsor-directors and institutional investors considering the sufferings of general investors during the period of coronavirus.

Fazle Kabir responded positively to Shibli, Serajul said.

If it was found nothing contradictory with the existing rules and regulations, the BB would issue instruction soon in this regard, a BB official said.

Earlier on May 11, Bangladesh Bank barred banks from disbursing any dividend for their shareholders before September, aiming to keep the financial health of banks unhurt from the economic hit of coronavirus emergency.

Banks that have already declared dividend for 2019 will have to revise their declarations if a number of conditions attached in a central bank notice are not met, says BB circular.

Banks those are able to keep a minimum 12.50% capital adequacy ratio(CAR) or more without the deferral facility taken from Bangladesh Bank for 2019 to meet other expenses including provision saving, could declare as high as 30% dividend with maximum 15% in cash dividend, said the BB notice.

After the Monday’s meeting, BSEC Chairman said that the central bank assured him of considering the proposal positively and hoped that the BB might issue instruction in this regard shortly.

Replying on the Tk 200-crore stock market-related fund formation issue, Serajul also said that the BB governor  assured the BSEC chairman of motivating banks ethically on formation of such funds to support the ailing stock market.

Besides, the central bank informed the BSEC chairman that the stock market intermediaries would get the interest suspension facility announced by the government, the BB spokesperson said.

To enhance cooperation between the central bank and BSEC, both the regulatory bodies have appointed focal persons to discuss different issues on regular basis and take decisions more effectively, Shibli said.

On May 17, the government appointed Prof Shibli Rubayat Ul Islam, professor  at Dhaka University, as the new chairman of BSEC for the next four years.