Capital shortfall in 10 banks has increased by 37.1 per cent or Tk 7,221 crore at the end of December last year amid a series of irregularities in the country’s banking sector.
According to the latest Bangladesh Bank data, capital shortfall in the banks increased to Tk 26,687 crore at the end of December 31, 2018 from Tk 19,466 crore in nine banks a year ago.
Agrani Bank, AB Bank and National Bank of Pakistan were included in the list of banks which faced capital shortfall while Rupali Bank and Padma Bank (formerly Farmers Bank) managed to come out from capital deficit situation.
Of the 10 banks, capital shortfall in scam-hit Janata Bank increased the most, Tk 5,694 crore, in last year.
The figure increased to Tk 5,855 crore in December last year from Tk 161 crore in December, 2017 as the defaulted loans in Janata Bank amounted to Tk 17,304 crore as of December 2018, a threefold increase from Tk 5,818 crore as of December 2017 due to its clients’ failure in repaying loans.
The entire amount of about Tk 573 crore that Janata Bank gave out to five subsidiaries of Crescent Group became defaulted while AnonTeX failed to repay the bank its loans worth more than Tk 5,500 crore.
The government has initiated a process to inject Tk 100 crore in the bank for the bank’s survival.
Another state-owned bank, BASIC Bank, witnessed the second highest increase in capital shortfall Tk 738 crore.
Capital shortfall in the bank increased to Tk 3,394 crore from Tk 2,656 crore, the BB data showed.
A series of defalcations occurred from 2009 to 2012 by way of extending fictitious loans worth over Tk 6,000 crore to non-existent borrowers.
To keep the bank functioning, the finance minister has already decided to extend Tk 50 crore fund to the bank.
Janata Bank has so far received Tk 1,214 crore in bailout funds and BASIC Bank Tk 3,390 crore in bailout funds.
Capital shortfall in Bangladesh Krishi Bank, that has been suffering from loan irregularities, increased by Tk 670 crore to Tk 8,447 crore at the end of December last year from Tk 7,777 crore a year ago.
Bangladesh Commerce Bank’s capital shortfall increased by Tk 138 crore to Tk 384 crore from Tk 246 crore.
ICB Islami Bank’s provision shortfall increased to Tk 1,552 crore from Tk 1,495 crore.
Capital shortfall in Sonali Bank and Rajshahi Krishi Unnayan Bank, however, declined to Tk 5,320 crore and Tk 712 crore respectively.
Agrani Bank’s capital shortfall stood at Tk 883 crore at the end of December 31, 2018.
Capital shortfall in AB Bank and National Bank of Pakistan was Tk 100 crore and Tk 40 crore respectively.
As per the BASEL-III requirement, banks are supposed to keep 10 per cent of their risk-based assets or Tk 400 crore, whichever is higher, from their capital. Any failure is considered as bank’s capital shortfall.
However, the overall capital in the banking sector witnessed Tk 2,553 crore in surplus at the end of December, 2018.
All the banks were supposed to keep Tk 1,00,007 crore capital whereas they kept Tk 1,05,60 crore from their capital.
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