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BKB seeks funds for recapitalisation

  • Published at 06:09 pm January 7th, 2014

The state-owned specialized Bangladesh Krishi Bank has sought fund and other facilities from the government to revive the cash-trap bank under the ongoing recapitalization programme.

The state owned specialised bank urged the Bank and Financial Institution Division under finance ministry to address the two major issues such as issuance of the public bonds against the accumulated losses and non-payment of corporate taxes till the accomplishment of the recapitalisation programme.

The bank has also sought Tk1400cr to enhance its paid up capital.

“Authority concerned is now examining the bank recapitalisation proposal, which was signed by managing director of bank Md Abdul Salam,’’ an official of the banking division told the Dhaka Tribune yesterday.

The government has already disbursed Tk4,100cr to help four-state -owned banks to cover up their capital shortfall created mainly because of the large-scale credit scams that surfaced one and half year ago, he added.

The government injected Tk4,100cr to four state-owned banks and Tk 67 cr to the Bangladesh Commerce Bank to issue right share from existing capital. Sonali Bank got Tk1,995crore, Janata Bank got Tk814crore, Agrani Bank got Tk1,081 crore while Rupali Bank got Tk210 crore.

As per the proposal, Krishi Bank has sought to issue redeem bond against the accumulated losses of Tk2,739.78cr till June 30, 2012 to absorb the shock of bank’s losses incurred in the last couple of years.

According to the Krishi Bank proposal, the bank will be relieved from all the corporate tax system until and unless the government issued redeem bond against the accumulated losses incurred in last couple of years.

The proposal also said the authorized capital of Bangladesh Krishi Bank needed to be increased to Tk3,000cr from the existing Tk1,500cr while paid up capital needed to be increased to Tk2,300cr from existing amount of Tk900cr. That’s why, Bangladesh Kirshi Bank will need Tk1,400cr to enhance its paid up capital to Tk2,300cr under Basel two.

Banking Secretary Dr M Aslam Alam told the Dhaka Tribune the government has given Tk4100 cr from the budget of the current fiscal year to recapitalise four-state owned banks while it has still enough funds to allocate for the recapitlisation of the more state owned banks in the country.