The bank authorities took the decision yesterday

The government is likely to pump up Tk5,000 crore into the four state-owned banks in the new fiscal year to bridge their capital shortfalls.

The figure is almost 22% higher than the outgoing fiscal year’s Tk4,100 crore, which was allocated in the first phase as a bailout package against the banks capital deficits.

With an allocation for bridging the capital shortfalls of the state-owned banks, the government’s non-development capital expenditure may now stand at Tk26,600 crore in the new fiscal year, beginning from next month.

The figure is more than 37% higher than the revised allocation of Tk18,909 crore and 24% higher than the original outlay of Tk20,978 crore in the outgoing fiscal year.

“The government will allocate fund for the state-owned banks to convert their goodwill to capital,’’ Finance Minister AMA Muhith had earlier told the Dhaka Tribune.

Non-development capital expenditure means that the government will invest the amount in asset collection, land acquisition, construction and public works, share and equity in the new budget.

Of the total outlay of non-development capital expenditures, for revitalising the moribund capital market, the government might allocate Tk1,600 crore, a sharp increase of almost 78% over the outgoing fiscal year’s allocation of Tk9,00 crore.

The government had revised down the allocation to Tk300 crore from Tk900 crore during the outgoing fiscal as the fund was not utilised due to the tougher disbursement conditions imposed upon the small investors, who were badly affected in the share market debacle in late 2010. 

However, the country’s twine bourses demanded to allocate Tk5,000 crore for the upcoming fiscal to stabilise the market.

Referring to Bangladesh Fund of Tk5,000 crore that was formed after the share market debacle in late 2010, former advisor to the caretaker government Mirza Azizul Islam had earlier said, “As this fund is yet to be utilised, I don’t think any market stabilised fund is needed right at this moment.”

“Some South Asian countries have already formed such market stabilisation funds in 1996-98 but in most cases such kind of fund eventually had become losing concern,” he, however, added. 

The assistance is the first tranche of the $350m multi-tranche financing facility (MFF) approved by ADB under the Skills for Employment Investment Program

Graft-ridden BASIC Bank yesterday suspended Md Waliullah, the manager of its Gulshan branch, on charges of corruption, a senior official of the bank said.
Waliullah was 'stand released' on Monday and sent to the bank's headquarters.
“He has failed to perform his duty,” Major (retd) Ruhul Alam, a deputy managing director, said, adding that an investigation will be carried out soon.
Officials at the bank said, once Waliullah had a good relation with Sheikh Abdul Hye Bacchu, chairman of the board of directors. Bacchu recruited him from another troubled lender, Bangladesh Commerce Bank, early last year.
BASIC Bank hit the spotlight after the central bank detected irregularities involving more than Tk 4,500 crore in loans between 2010 and 2012. Of the loans, more than Tk 1,500 crore was disbursed from the Gulshan branch on weak documents, such as inflated mortgage prices, without assessing borrowers' creditworthiness.

Updated data of the bank shows, the Gulshan branch lent nearly Tk 3,112 crore in 2013 against the branch's deposit of Tk 695 crore. Its loan-deposit ratio (LDR) stood at an astonishing 427 percent, meaning the branch granted Tk 427 as loans against deposit of Tk 100. The permissible limit of LDR is only 85 percent.
Nonperforming loans of the branch reached nearly 18 percent of its total loans at the end of 2013.
Multiple attempts to contact Waliullah were unsuccessful.
Rabiul Alam Tipu replaced him as manager of the branch on Monday.

Dhaka : A meeting of newly formed Board of Directors of Islami Bank Bangladesh Limited was held on Saturday at the Board Room of Islami Bank Tower, reports in a press release. Prof. Abu Nasser Muhammad Abduz Zaher, who was re-elected Chairman of the Bank presided over the meeting. Yousif Abdullah Al-Rajhi of Saudi Arabia and Engr. Mustafa Anwar, Repr. of the Public Institution for Social Security, Kuwait re-elected Vice Chairmen, Engr. Md. Eskander Ali Khan, Repr. Al Rajhi Co. for Industry & Trade, KSA, Md. Abul Hossain, Repr. of Investment Corporation of Bangladesh (ICB), Directors were present in the meeting. Among local and foreign directors, Dr. Areef Suleman, Repr. of Islamic Development Bank, Jeddah, KSA, Mohammed Abdullah Al Jalahma, Repr. of Kuwait Awqaf Public Foundation, Professor N.R.M Borhan Uddin, PhD, Md. Abdus Salam, FCA, FCS, Humayun Bokhteyar, ACPA, FCA, Professor Dr. A.K.M. Sadrul Islam, Barrister Mohammed Belayet Hossain and Mohammad Abdul Mannan, Managing Director of the Bank were present in the meeting.
Executive Committee and Audit Committee of the Bank were re-formed in the meeting. Besides, different important policies of the Bank were encapsulated and various business proposals were approved in the meeting which expressed its satisfaction while evaluating the performance of the Bank over the success and progress achieved so far.