View from City Road: A better deal is needed on BCCI

BCCI's hundreds of thousands of creditors around the world can take comfort from the firmest indication yet that the bank's majority shareholder, the state of Abu Dhabi, is considering an agreement with the liquidators that will give them an increased return.

Several creditors' groups have said they will take legal action against Abu Dhabi this year if it does not significantly improve the dollars 1.7bn compensation plan which was scuppered by the Luxembourg courts last year.

Last November the Independent reported that Abu Dhabi was considering two options in an attempt to head off years of expensive and embarrassing litigation over the BCCI case. It could either bypass the accountants and lawyers in the case, and thus increase the amount actually received by creditors; or it could merely increase its own contribution to the compensation plan.

This week Ghanim Faris Al Mazrui, chairman of the working group on BCCI for the majority shareholder, said he wanted creditors to get more money to compensate them for the wait they have had since regulators closed BCCI in 1991.

Sources close to the Gulf state still insist that it is most unlikely that the Sheikhdom will offer more money.

But the need to tweak the deal so that creditors get a better payoff while Abu Dhabi saves face is clear.