Bangladesh Bank (BB) has asked the listed banks to deposit 'unclaimed' dividends into the central bank's account in line with a provision of the Bank Companies Act, 1991.
As a result, the listed banks will have to deposit unclaimed dividends into the BB account instead of the account of Capital Market Stabilisation Fund (CMSF), said a BB official.
Meanwhile, Chairman of the Bangladesh Securities and Exchange Commission (BSEC) Prof Shibli Rubayat Ul Islam on Tuesday said the issuers would face stern action if they fail to deposit investors' dividends into the CMSF account within March 31, 2022.
The BSEC chairman and other top officials of the CMSF said that the fund had been formed with a good intention of supporting the market along with completing the settlements of investors' longstanding claims on dividends.
Asked, an official of the central bank said different banks wanted to know what they would do in case of complying with the securities regulator's order regarding deposit of unclaimed or undistributed dividends into the CMSF.
"The central bank has sent letters to the banks asking them to follow the bank companies act," said the BB official.
He said the securities regulator was also informed of the provision of the bank companies act at a coordination meeting held in September, 2021.
"The subsection 2 of the section 35 of the bank companies act has a provision of depositing unclaimed dividends into the account of the central bank," said the BB official.
When asked about the Bangladesh Bank stance on the dividend deposit, an official of the BSEC said a number of banks already submitted their dividend portions to the CMSF.
On June 27, 2021, a gazette notification was issued on the BSEC rules framed for formation and operation of the CMSF.
According to the BSEC rules, the CMSF shall be a perpetual fund for functioning as a custodian of undistributed or unclaimed or unsettled dividend (cash or stock) or un-allotted rights shares or non-refunded public subscription money in favour of the shareholders or stockholders or investors.
As part of the settlement of investors' claim, the CMSF has already distributed payments to 18 investors.
The BB official said there was a difference between the 'unclaimed dividend' and 'undistributed dividend'.
"The central bank has no say on mobilisation of the undistributed dividend. But the banks will have to deposit the unclaimed dividend into the account of the central bank," said the BB official.
He said after one year of depositing the unclaimed dividend into the BB's account, the fund would be transferred to the government's exchequer on completion of some procedures. Asked, a senior official of the CMSF said they would depend on a coordinated decision taken by both the regulatory bodies.
The subsection section © of (1) of the section 35 of the Bank Companies Act, 1991 reads, "One branch of a banking company has transmitted to another of its branches a cheque, draught or bill of exchange and the amount of money has not been paid to it for a period of ten years from the date of issue, certification or acceptance of that cheque, draught or instrument".
The subsection 1 (d) of the section 35 also reads: "An approved security, share, article or valuable given into custody of a banking company, henceforth generally and particularly referred to as valuables, has not been inspected or recognized by the depositor for a period of ten years from his last inspection or recognition."
