The Bangladesh Bank has asked 11 banks to submit their sortout plans for alleviating their capital shortfalls. That banks have suffered capital shortfalls in the first half of 2021.
The banks which were asked to submit their plans are Bangladesh Krishi Bank, Sonali Bank, Janata Bank, Agrani Bank, ICB Islamic Bank, BASIC Bank, Rajshahi Krishi Unnayan Bank, Bangladesh Commerce Bank, Rupali Bank, Padma Bank and AB Bank.
At the end of June 30, 2021, capital shortfall in BKB was Tk 11,843.97 crore, that in BASIC Bank was Tk 1,927.2 crore, ICB Islamic Bank Tk 1,642.49 crore, BCBL Tk 1,146.21 crore, Padma Bank Tk 461.49 crore, AB Bank Tk 329.52 crore, Sonali Bank Tk 3,557.86 crore, Agrani Bank Tk 1,960.23 crore, RAKUB Tk 1,506.4 crore, Rupali Bank Tk 664.94 crore and Janata Bank Tk 345.04 crore.
Banks should have to maintain a minimum 10 per cent capital to risk weighted assets ratio (CRAR), 3 per cent leverage ratio and 2.5 per cent capital conservation buffer.
In terms of capital to risk weighted assets ratio, ICB Islamic Bank’s performance is the worst with a negative capital adequacy of 136.45 per cent.
The state-owned banks only depend on funds from the government to improve their capital base. The banks have been failing to strengthen their capital base because the government has stopped recapitalizing the SoBs.
On the other hand, scam-hit BASIC Bank received the highest amount of bailout funds of Tk 3,390 crore, Sonali Bank received Tk 3,003 crore, Janata Bank Tk 814 crore and Rupali Bank Tk 240 crore at H1 of 2021
The central bank suggested all the banks to park fresh capital and control the amount of non-performing loans.
Source: New Age