Govt moves to recapitalise state-run banks | daily-sun.com

Govt moves to recapitalise state-run banks

Jannatul Islam     15 February, 2018 12:00 AM printer

Govt moves to recapitalise state-run banks

Government is set to recapitalize major state-run banks which have been facing serious capital shortfalls from the current fiscal’s budgetary fund.

The Financial Institutions Division of the Ministry of Finance conducted a meeting with top executives of eight state-run banks to review their demands on Wednesday.

The banks include Sonali, Janata, Rupali, Agrani, BASIC, Bangladesh Development Bank and two specialised banks Bangladesh Krishi Bank and Rajshahi Krishi Unnayan Bank.

According to the Bangladesh Bank data, of the eight banks, scam-hit Sonali, BASIC and Janata were facing a severe capital shortfall of Tk 15,830 crore until September last year.

FID Senior Secretary Eunusur Rahman presided over the meeting aimed at supplying recapitalisation fund for the state-owned commercial and specialised banks which are striving for fund, sources at meeting confirmed.

“The FID will request finance division to give certain amount of money in favour of the banks from the allocation of Tk 2,000 crore kept in the current budget,” a top executive of a state-run bank who attend the meeting, told the daily sun. Sonali is facing a capital shortfall of Tk 3,140 crore, BASIC Tk 2,523 crore and Janata Tk 1,273 crore.

Officials said the capital shortfall of Janata would increase following detection of loan scam of more than Tk 5,000 crore by lesser-known AtonTex in January.

Two specialised banks BKB and RAJUB – are also facing capital shortfall of Tk 7,540 crore and Tk 743 crore respectively. Some experts and financial analysts, however, criticised the repetition of providing bailout funds especially to scam-hit banks saying that the tax payers’ money was being put in black holes.

According to budgetary document, the government gave Tk 14,655 crore to bail out state-owned banks including scam-hit BASIC Bank and Sonali Bank in eight years between 2010-2011 and 2016-17.

A total of Tk 11,487 crore or 78 per cent of the subsidy, which the government calls recapitalisation fund, was given in the past four financial years between 2013-14 and 2016-17.

Agrani Bank Chairman Zaid Bakht thinks the recapitalization is legal subsidy as the government didn’t pay the banks regularly according to its service for the national activities.

“The recapitalisation is crisitised from a portion of critics. However, its not illegal as the banks are serving to the government in many development activities with a token money. So I think the recapitalisation is not illegal at all,” Zaid Bakht told the daily sun on Wednesday. He also recommended that the banks run with public money should sincere to beome profitable.

Major portion of the allocation in the past four fiscals went to largest state-owned Sonali Bank and once profit-making BASIC Bank as bailout fund after both the banks were hit hard by loan scams. The two banks received Tk 6,095 crores in past four fiscal years.

 


Top