Meeting Capital Shortfall
BB asks 14 banks to give plans by Dec 7
Bangladesh Bank has asked 14 banks, which have shortfalls in required capital, to submit their plans by first week of December on how they will meet the shortfalls.
The BB issued letters in this regard to managing directors and chief executive officers of the banks on Wednesday. The 14 banks which failed to maintain capital in the last quarter (July-September) are Sonali Bank, Janata Bank, Agrani Bank, Rupali Bank, BASIC Bank, Bangladesh Krishi Bank, Rajshahi Krishi Unnayan Bank, Exim Bank, ICC Islamic Bank, Premier Bank, National Bank, NRB Bank, Bangladesh Commerce Bank and National Bank of Pakistan.
A BB official told New Age on Thursday that the BB would set separate directions for the banks after receiving the plans.
He said that the crisis in each of the banks was different as the four state banks would get capital from the government to make up their shortfalls.
The 14 banks are facing the capital shortfalls as their asset quality declined significantly in recent times, he said.
The total capital shortfall in the banks stood at Tk 9,889 crore while the shortfall in the four state-owned banks was Tk 8,863 crore as of September 30.
As per the BB guideline, the banks are to preserve at least 10 per cent capital against their risk weighted assets.
The risk weighted assets have increased significantly in the banking sector over the last one and half years as the banks sanctioned and disbursed loans without considering the clients’ standard.
Under the circumstances, the defaulted loans increased by Tk 13,994.59 crore in the first nine months of this year, according to the BB data.
Due to the increased trend in defaulted loan, 10 banks failed to keep required provisions against their loans and advances as of September 30.
Most of the banks which failed to keep the required provisions plunged in a capital shortfalls in the last quarter.
-With New Age input
