After around 20 years of legal battle, the finance ministry and Eastern Bank Limited (EBL) are going to pay back Tk 614 million to the Saudi Bangladesh Industrial and Agricultural Investment Company (Sabinco).

The amount got stuck in now-defunct Bank of Credit and Commerce International (BCCI), which turned into EBL in 1992.

BCCI was a major international bank founded in 1972. The BCCI faced a massive regulatory battle in 1991 that led to liquidation of the Bank in different countries, including Bangladesh.

Sabinco had a deposit of Tk 614 million in BCCI’s Dubai branch.

Bangladesh Bank took over the management and started restructuring the Bank. The Bank was renamed Eastern Bank in 1992.

All the deposits and debts of BCCI were transferred to EBL after the take over.

The Sabinco is a development financial institution and investment company that was established through joint initiatives of the governments of the Saudi Arabia and Bangladesh under a protocol signed in 1984.

The dispute went to the court later and the legal battle has been continuing over the last 20 years.

Ali Reza Iftekhar, managing director and CEO of EBL, told daily sun that both sides had agreed to withdraw cases against each other while the fund would be transferred to Sabinco’s account within two weeks.

An agreement on the settlement was singed at the finance ministry on Wednesday.

Ali Reza Iftekhar and MD of Sabinco Quazi Shairul Hassain signed the agreement on behalf of the respective sides in presence of Banking Division Secretary Shafiqur Rahman Patwari Patwari.

The government and EBL will share some portion of the deposit amount as per the settlement.

The finance ministry will provide Tk 446.9 million while rest of amount will be borne by the EBL.

Earlier, Finance Minister AMA Muhith asked the banking division and the Economic Relations Division (ERD) to take necessary steps, so that the fund could immediately be paid back.

"I have pledged to the Saudi Arabian authorities to pay back Sabinco's money that was mismanaged in the presently-defunct Bank of Credit and Commerce International Ltd," the minister wrote in a directive to the secretaries concerned.

"The money has to be returned," Muhith noted, urging them to take necessary actions in this regard. The minister visited the Saudi Arabia in July last year and met several high-ups of the Saudi government. The issue was discussed there.

Bangladesh Bank Governor Dr Atiur Rahman last year informed the finance ministry that paying back the funds is much essential to maintain a good relationship between the two countries.

The Daily Sun/Bangladesh/ 15th March 2012