Budget FY23: Kamal for no capital injection in state-run banks

Finance Minister AHM Mustafa Kamal in his budget speech on Thursday said the government is avoiding the culture of capital injection in state-owned banks as part of its initiatives for building a self-reliant banking sector.

The minister placed the proposed budget for the 2022-23 fiscal year with an outlay of Tk 6,78,064 crore in parliament after the cabinet’s approval and the president’s authentication.

Kamal told parliament that the practice of capital injection in state-owned banks with the taxpayers’ money has been prevalent in the country for a long time.

“We have taken initiatives to get out of this culture and encourage state-owned banks to redesign their business models and conduct banking activities accordingly”, said Kamal.

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In the past 18 years, the government injected over Tk 20,000 crore of the taxpayers’ money into the state-run banks.

Despite injecting taxpayers’ money, ten banks, including seven state-run banks, collectively faced a capital shortfall of Tk 27,051 crore at the end of March this year.

The banks are Bangladesh Krishi, Sonali, Rupali, Agrani, BASIC, Rajshahi Krishi Unnayan, ICB Islamic, Bangladesh Commerce, Janata and Padma.