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High level meeting to fund state banks today

  • Published at 07:03 pm December 17th, 2013

A high-level meeting scheduled today would prioritise the state-run banks for providing them with fund from the national budget to help meet their capital shortfall.

The Budget Division of finance ministry convened the meeting at the ministry to devise a bailout plan for the banks – Sonali, Janata, Agrani, Rupali, Bangladesh Commerce Bank, and Bangladesh Krishi Bank.

An amount of Tk4,100 crore would be disbursed among the banks commensurate with their respective needs subject to the banks would comply with the credit risk-related reforms, said a senior official.

He said the fund would not be disbursed this month because most of the fund under the ministry and the division already exhausted in first five months of the current fiscal year due to the current expenses owing to the prolonged political violence and deadlock.

Earlier, the government had decided to provide Tk4,100 crore to three state-owned banks of Sonali, Janata and Agrani.

Meanwhile, the IMF set three new conditions for four state-owned commercial banks under its extended credit facility. They are restoration of capital position, full recovery of default loans from state-run enterprises and automation of system by March 2014.

An IMF staff report released recently said the conditions emerged as the banks’ financial performance deteriorated along with the Hall-Mark and Bismillah scams.

The central bank found significant weaknesses in asset quality, liquidity management, and internal audit control.