NBFIs that availed the BB’s deferred provisioning facility are not allowed to declare any cash dividend
Bangladesh Bank yesterday ordered listed non-bank financial institutions to not give a dividend of more than 15 per cent for the financial year that ended on December 31, 2020, in anticipation of a spike in default loans for the pandemic that can send the institutes into a capital shortfall.
NBFIs that availed the BB’s deferred provisioning facility are not allowed to declare any cash dividend. With prior approval from the central bank, they can declare a 5 per cent stock dividend.
Those with classified loans of more than 10 per cent or a capital adequacy ratio of less than 10 per cent will not be able to pay any dividend without the approval of the central bank.
Of the 34 banks, 23 are listed with the capital market.
And of the 23, IDLC Finance, the largest NBFI, has announced a 35 per cent cash dividend for the 2020 financial year, which saw the 35-year-old lender log in a record profit of Tk 254.1 crore.
Earlier on February 7, the central bank gave out a laundry list of conditions to banks for announcing dividend for 2020.