BASIC Bank deposits declined by 14.69% between December last year and the end of March, according to the government’s financial institutions report.
On the other hand, the loans and advances situation at BASIC Bank improved by 2.27% at the end of March compared to December.
According to the Financial Institutions Division report, the BASIC Bank had a deposit of Tk1.37crore in March, Tk23 lakh less than the Tk1.58 crore it had at the end of 2016.
The total loans and advances of the bank stood at Tk1.37 crore in March, marginally bigger than Tk1.34 crore from December.
BASIC Bank’s default loans amounted to Tk7,229 cr at the end of March this year, growing from Tk6,392 cr at the end of December last year, according to the bank’s data.
In the outgoing fiscal year, the Finance Division has decided to provide BASIC Bank Tk1,000 crore from the exchequer to improve clients’ trust damaged by massive corruptions.
Funds will be supplied from the outgoing fiscal year’s revised outlay of Tk2,000 cr. Over the years, BASIC has received Tk2,390 crore from the budget under the government’s recapitalisation programme.
According to Finance Division working papers, the capital shortfall of the BASIC Bank is Tk1,934.5 crore while the capital reserve ratio was only 7.55% in 2015. An amount of Tk9,457.60 crore was disbursed from the five year budget allocations for recapitalisation.
The Finance Division observed that the default loan situation of the state-run banks has not improved during the time that they received funds from the budget to meet capital shortfalls.
It said the recapitalisation funds could only improve the banks’ balance sheet.
The observations came at a recent Finance Division meeting on capital shortfalls of seven state-owned banks with Finance Minister AMA Muhith in the chair.
The meeting said the capital shortfall of the BASIC Bank had declined by Tk706 crore in the last two fiscal years though the bank’s overall default loan situation had not improved.
Finance Ministry thinks that without recapitalisation funds, the bank will not be able to do business.
BASIC is running its Letter of Credit business with the help of Sonali Bank.
Earlier, Finance Minister AMA Muhith said: “We will treat BASIC Bank with special importance to help it meet capital shortfall.”
He said the bank needed “special nurturing” as its condition is not normal now.
“It cannot be compared with other banks.”