State-owned banks to get capital replenishment

Dhaka,  Thu,  21 September 2017
Published : 20 Mar 2017, 00:20:54

State-owned banks to get capital replenishment

Recouping BASIC Bank's capital shortfall a special case: Muhith
FE Report

The government decided to funnel money into seven state-owned banks (SoBs) again to meet their capital shortage to some extent.

Officials said a decision to this effect came Sunday from a meeting at the ministry of finance with Finance Minister AMA Muhith in the chair.

State Minister for Finance M A Mannan, Bangladesh Bank governor Fazle Kabir, secretary of the banks and financial institutions division Eunusur Rahman and chief executives of the banks attended the meeting.

However, the meeting did not take a concrete decision as to how much each of the banks will be fed against their total capital shortfall worth Tk 150 billion.

Presently there is a Tk 20 billion budgetary allocation to replenish SoBs' capital and meet other needs. A decision will be taken next month in this regard, Mr Muhith told newsmen after the meeting.

Meeting sources said apart from the capital shortage of banks, the provisioning shortfall, and their bond-issuance eligibility and capacity also came up for discussion.

In the meeting BASIC bank managing director Khondoker Md Iqbal made a power-point presentation where he portrayed the necessity of floating Tk 26 billion worth of bond to meet capital shortfall.

Sources said following the presentation the minister agreed that the problem-ridden bank is in real need of meeting the capital shortfall, as its overseas business is being hindered for being hard-up.

The meeting decided that BASIC bank's capital shortfall will be met in one way or another -- either by issuing bonds or providing cash -- taking the bank as a special case, sources said, seeking anonymity. "The BASIC bank's problem is very different from others. We can't treat it like the other banks. It need's nursing," Mr Muhith said.

He said BASIC has become a special institution. "We have to think how the BASIC's problem can be met. The ministry will take an initiative in consultation with BASIC's management in this regard."

Replying to a query Mr Muhith refuted a remark made by many -- providing money to BASIC bank is similar to putting money in a hole. "No. It's not true," he said.

"I can assure you that the money won't go down the drains," he said replying to another query.

The finance minister in this case defended the present BASIC bank management, saying that they have done very well.

When his attention was drawn regarding action against the former chairman of the bank, Mr Muhith said necessary documents were given to the Anti-Corruption Commission. "Wait and see, what happens."

Data show until last December, Sonali Bank had a capital shortage of Tk 26 billion, Janatal Bank's shortage stood at Tk 6.64 billion, Agrani Bank Tk 2.0 billion, Rupali Bank Tk 10 billion, BASIC Bank Tk 22 billion, Bangladesh Krishi Bank Tk 74.85 billion, and Rajshahi Krishi Unnayan Bank Tk 7.05 billion.
Editor : A.H.M Moazzem Hossain
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