Country’s 14 banks faced a capital shortfall of Tk 37,507 crore at the end of the July-September quarter of the current year, up from Tk 33,744 crore at the end of the April-June quarter.
The capital shortfall of these banks has increased by Tk 3,763 crore to Tk 37,507 crore in the third quarter of this year, said sources in Bangladesh Bank.
Due to the capital shortfall in these banks, the whole banking sector suffered the capital shortfall of Tk 11,483 crore at the end of the July-September quarter of this year.
Insiders say that the capital shortfall is increasing mainly due to a rise in non-performing loans (NPL) in the banking sector which stood at Tk 1,55,397 crore at the end of the July-September period (Q3) of this year, occupying a 9.93 per cent of the banking sector’s outstanding loans of Tk 1,565,195 crore. Bad loans amounted to Tk 1,36,317 crore, which was 87.72 per cent of outstanding classified loans.
Against bad loan, up to 100 per cent provision has to be kept against defaulted loans. Bank keeps the provision from the capital, as a result banks are facing the capital shortfall.
Ahsan H Mansur, Executive Director of Policy Research Institute of Bangladesh (PRI), told The Business Post, "These banks are not complying with the rules and regulations. On the other hand, the central bank is not telling them anything. If any bank is suffering the capital shortfall, then it can't provide dividends to its shareholders.”
On condition of anonymity, a senior official of the central bank said that a few banks suffering capital shortfall are providing dividends to their shareholders. But as per the rules, these banks can't provide dividends to their shareholders.
According to sources, Bangladesh Krishi Bank (BKB) has facing the highest capital shortfall in the banking sector. Its capital shortfall rose to Tk 15,803 crore in the September quarter from Tk 1,379.61 crore in the June quarter.
Citizens Bank, the latest fourth-generation bank launched in July 2022, has also been facing a capital shortfall at the end of the July-September quarter of this year. Its capital shortfall stood at Tk 95.37 crore at the end of the September quarter of 2023.
The capital shortfall of Agrani Bank stood at Tk 4,828 crore in September quarter, which was Tk 3,767 crore in June quarter. The capital shortfall of Basic Bank stood at Tk 3,150 crore in September quarter, which was Tk 2,352 crore in June quarter of this year. The capital shortfall of Janata Bank stood at Tk 3,029 crore in September quarter, which was Tk 2,189 crore in June quarter.
The capital shortfall of Rupali Bank stood at Tk 2,121 crore in September quarter, which was Tk 2,230 crore in the previous quarter. The capital shortfall of National Bank stood at Tk 2,024 crore in September quarter, which was Tk 1,379.61 crore in June quarter. The capital shortfall of ICB stood at Tk 1,823 crore in September quarter, which was Tk 1812 crore in June quarter.
The capital shortfall of BCBL stood at Tk 1,402 crore in September quarter, which was Tk 1,313 crore. The capital shortfall of Rajshahi Krishi Unnayan Bank (RAKUB) stood at Tk 2472 crore in September quarter, which was Tk 2,386 crore in June quarter.
The capital shortfall of Padma Bank stood at Tk 607.92 crore in September quarter, which was Tk 497.45 crore in June of this year. The capital shortfall of Bengal Bank stood at Tk 70.70 crore in September quarter of this year, which was Tk 87.93 crore in June quarter.
The capital shortfall of National Bank of Pakistan (NBP) stood at Tk 43.65 crore in September quarter, which was Tk 42.45 crore in June quarter. The capital shortfall of Habib Bank stood at Tk 33.40 crore in September quarter, which was Tk 36.33 crore in June quarter of this year.
At the end of Q3, NPLs stood at Tk 65,797 crore in the state-owned commercial banks, which was 21.70 per of the total classified loans in the country. Private commercial banks' NPLs stood at Tk 81,537 crore, which was 7.04 per cent of the banking sector.
