In the upcoming budget for the fiscal year 2023-24, the government plans to set aside Tk 1,000 crore to address the capital shortfall of state-owned commercial banks, even though no funds have been released for them in the past four fiscal years. The allocation is part of the recapitalization fund, intended to support the banks, but the finance ministry has not provided financing for them since FY19-20. Although the amount is being allocated in the next budget, there are concerns that it may not be released this year either. The finance ministry officials consider the matter a ‘dead case.’
While the Ministry of Finance continues to allocate funds for bank recapitalization, these amounts are primarily being utilized to repay interest on loans of struggling industries rather than supporting the banks directly. Finance Minister AHM Mustafa Kamal has made it clear that there are no plans to assist state-owned banks in replenishing their capital shortfall, encouraging them instead to adjust their business models and operate more efficiently.
It is worth noting that the total capital deficit of five state-owned banks, including Sonali, Rupali, Agrani, Janata, and Basic, reached Tk 11,482 crore by the end of December last year. Despite the banks’ demands, the finance ministry did not release the allocated funds, and the banks have been requesting the money for the past two years.
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