BB, BSEC will jointly take decision on undistributed cash dividend, capital market stabilisation fund: Kamal

The central bank and the stock market regulator will jointly take decision on the use of undistributed cash dividend and contribution to the capital market stabilisation fund for banks and non-banks, finance Minister AHM Mustafa Kamal said today.

The minister spoke after a meeting of the cabinet committee on economic affairs.

On Monday, the central bank informed the Bangladesh Securities and Exchange Commission (BSEC) that listed banks and non-bank financial institutions cannot comply with the stock market regulator's orders on the capital market stabilisation fund and cash dividend payment as they are inconsistent with the Bank Company Act.

The BSEC passed a rule on the stabilisation fund in June that would be formed using the undistributed and unclaimed dividends of the listed companies.

The aim is to use the funds to safeguard the interest of the stockmarket and general investors.

On the other hand, the commission recently allowed the listed companies to declare cash dividends from the profits made in the just-concluded financial year despite having accumulated losses.

However, the central bank said this is inconsistent with the Bank Company Act, the Financial Institutions Act, and international norms.

The decisions the BSEC took are the government's decision, Kamal said.

"When the government take any decision, you are well informed about that. I think Bangladesh Bank and BSEC will take the decision jointly abiding by rules that how a company will provide dividend."