An extensive expansion has been occurred in capital base of the country’s banking sector during last four years. It has been happened due to transfer of a large proportion of profit of banks into capital. As a result, base of banking system becomes stronger.

Capital adequacy is one of the key parameter of economic fitness and stability of banks. That’s why for strengthening of the capital base of banks, Basel-II accord relating to capital adequacy has been fully implemented by the central bank following the international best practices rules & regulation. Necessary steps have also been taken for implementing Basel–III accord in near future. According to Basel-II, banks are required to maintain capital at 10% of risk weighted assets, but in reality the banks have been able to maintain more than the required level which is now 11.31%.

Mentionable that, according to Basel-II accord banks had to maintain risk based capital adequacy up to 2008. As per this accord, the total amount of actual capital maintained by banks was taka 20,578 crore at end of 2008. The figure has gone up to taka 56,201 crore over the last four years (up to June 2012). This capital base increased due mainly to respond to risk sensitive Basel-II accord.

News: The Daily Sun/Bangladesh/24-Nov-12