Kazi Zahidul Hasan :
State-owned Banks (SOBs) are again set to receive Tk 2,000 crore in form of recapitalisation from the government in the next fiscal year.
The fund will be infused the banks through a budgetary allocation, Finance Ministry officials said.
Seven state-owned commercial and specialised banks– Sonali, Janata, Agrani, Rupali, BASIC, Bangladesh Krishi Bank and Rajshahi Krishi Unnayan Bank — recently demanded Tk 20,398 crore recapitalisation funds from the government citing their capital shortfall.
“The government will allocate Tk 2,000 crore fund in the next budget to recapitalise the state-owned banks,” a senior Finance Ministry official told The New Nation yesterday.
He said the recapitalisation is part of the government’s promise to help banks meet capital shortfall as well as Basel III capital requirement norms.
The government also set aside Tk 2,000 crore in the current budget in the name of recapitalisation for the capital deficient state-owned banks.
“The fresh recapitalisation funds will be infused to them under a comprehensive policy framework,” said the Finance Ministry official, adding, “Regulatory capital of major state-run banks will be maintained and they will not be allowed to fail.”
He, however, said that the state-owned banks must improve their governance and performance reinstating responsible banking and ethical lending practices.
When asked, he said, “Fresh capital will be injected into the banks based on an objective assessment on their previous performance and growth potential. The funds will be provided in a phased manner tagging many conditions”.
Justifying the need for the bank’s recapitalisation programme, the Finance Ministry official said, “State-owned Banks are now operating with huge capital shortfall resulted from loan scams and soaring bad loans in their overall credit portfolios. This has weakened their financial health requiring fresh capital.”
“The government is going to inject fresh capital into the banks to salvage them from further vulnerability. The move will help the banks to survive and sustain their business,” he added.
In the fiscal year 2014-15, the government had pumped Tk 1,500 crore to Sonali and BASIC banks as part of its public bank’s capital infusion programme.
It had also pumped Tk 4,100 crore recapitalisation funds into Sonali, Janata, Agrani and Rupali banks in fiscal year 2013-14 in first phase. In the second phase, BKB, RAKUB, Bangladesh House Building Finance Corporation and Grameen Bank were given Tk 309 crore to meet their capital shortfall.
The total budgetary expenditure for capital shortfall of such banks was almost Tk 10,000 crore in five years since 2011.
