Kazi Zahidul Hasan :Six state-owned banks have reported a cumulative capital shortfall of Tk 10,916 crore in second quarter (April-June) of the current year, owing to below-book valuations alongside poor asset quality and earnings, and large scale financial irregularities.They are: Sonali Bank, Janata Bank, Rupali Bank, BASIC Bank, Bangladesh Krishi Bank and Rajshahi Krishi Unnayan Bank.Among these banks, Sonali Bank, the largest public sector’s commercial bank, alone reported a capital shortfall of Tk 2,678 crore as on June this year which was Tk 599 crore in the previous quarter, according to an official figure released by Bangladesh Bank (BB).The BB’s figure suggests that capital shortfall of Sonali Bank increased by fourfold within a quarter. The capital shortfall of Rupali Bank stood at Tk 554 crore and it was Tk 345 crore in Janata Bank. As on June this year, the capital shortfall of scam-hit BASIC Bank stood at Tk 2,916 crore against a shortfall of Tk 3,634 crore as on March 31 this year. Bangladesh Krishi Bank, a specialized public bank, has reported a capital shortfall of Tk 6,607 crore as on June this year which was Tk 6,015 crore in the previous quarter.Besides, Rajshahi Krishi Unnayan Bank reported a Tk 494 crore capital shortfall during the period under review. The capital shortfall of the bank was Tk 533 crore in previous quarter. According to the BB’s figure, Agrani Bank, another public commercial bank, has been able to maintain Tk 52 crore surplus capital as on June this year.Along with these public banks, three private banks-ICB Islami Bank, Commerce Bank and Premier Bank-were also running by capital shortfall as on June this year.”We have ordered these banks to plug their capital hole following the central banks’ guidelines,” a senior BB official told The New Nation on Thursday.He said, the public banks continue to be largely dependent on government for capital, while the private banks have been asked to raise their core equity capital through the markets. Apart from these banks, he said, other banks, in contrast, are already maintaining relatively healthy capitalisation levels with healthier asset quality and earnings.When asked, the BB official said, the recent spate of loan scams in public banks are mainly responsible for their capital shortfall.”Capital shortfall is badly affecting their leading business and exposing them into future financial vulnerability,” he added. Earlier, the government has set aside a budgetary allocation of Tk 5,000 crore for the recapitalization of public banks. If the government releases the entire amount to them, these banks will require more Tk 6,000 crore to fill their capital hole.The country’s eight banks have reported a cumulative capital shortfall of Tk 12, 895 crore in the first quarter (January-March) of the current year.
