TDS Desk:

Finance Adviser Dr Salehuddin Ahmed has said shareholders affected by the merger of five Shariah-based banks will receive compensation, while acknowledging that the process is technically complex and will be calculated and implemented in stages.

Dr Salehuddin Ahmed made the remarks on Tuesday after a government procurement committee meeting, responding to questions about an earlier pledge to compensate ordinary shareholders. “I said it. Now we will consider this,” he said, noting that the central bank governor had taken a different view.

The adviser drew a distinction between protecting depositors, whose funds are secured, and compensating shareholders, which he described as technically challenging. “In most cases of these banks, the net asset value has become negative,” he said, noting compensation as “a technical and complex issue”.

He said some questioned why shareholders should be compensated for market investments but noted many may have bought shares based on market signals. “I said, let’s see what can be done to what extent,” he told reporters.

Outlining next steps, Ahmed said work is underway on the compensation method and that a future finance minister would implement it. He said a mixed model was being considered but it will take time. “Someone who bought shares for a lot of money might be given shares partially, or the rest might be given as compensation. That has to be calculated because the burden can’t be borne entirely by the shareholders.”

The comments relate to the state-led consolidation of five financially distressed Shariah-based banks: First Security Islami Bank, Union Bank, Global Islami Bank, Social Islami Bank and Exim Bank. The combined bank was launched as “Sammilito Islami Bank PLC.”

The finance adviser also said broader structural reforms were needed beyond one-off measures. “Sustainable economic development is not possible without equity participation and a bond market,” he said, urging stronger capital markets to reduce reliance on bank financing.