The government is going to grant Tk 10 billion to the scam-hit BASIC Bank to meet its capital shortfall, once more.

Besides, officials said, five state-owned banks (SoBs), one private bank, a specialised financial entity and restructured Grameen Bank (GB) together will also get another dollop of Tk 10 billion under different heads.

The ministry of finance has sent a proposal in this regard to the finance minister for approval, at a time when there has been a flurry of debate over repeated giving of taxpayers' money for so-called recapitalisation to the banks.

According to the proposal, the funds are set to be handed out to five state-run banks, private-bank IFIC, House Building Finance Corporation and Grameen Bank, the sources said.

The money will be made available from a fund of Tk 20 billion that has been earmarked in the budget for 2016-17 for recapitalisation.

And from this spare money, the scam-ridden BASIC Bank is getting the highest amount as it stood hollowed for fraudulent lending that led to its management shakeup.

Some Tk 10 billion, Tk 3.0 billion, Tk 1.0 billion, over Tk 1.64 billion and Tk 1.0 billion will go into the coffers of BASIC, Sonali Bank, Rupali Bank, Bangladesh Krishi Bank and Rajshahi Krishi Unnayan Bank (RAKUB) respectively from the budgetary fund, according to the finance ministry data.

Besides, Tk 1.85 billion will be provided to the IFIC as subscription fee for rights share. Also, Tk 1.50 billion and Tk 2.2 million will be provided to the house-building finance corporation and Grameen Bank respectively, according to government share ratio.

"We have given allotment from the recapitalisation fund to the SoBs and other agencies. The highest amount has been given to the BASIC Bank," said an official concerned.

Earlier, Bank and Financial Institutions Division (BFID) had sent the proposal for funding the state-run banks and Grameen Bank. In this connection, an inter-ministerial meeting was held on May 02 last.

The meeting recommended providing the proposed funds to the banks from the budget for 2016-17 for recapitalisation.

The government has kept aside Tk 20 billion as a head of recapitalisation of banks and others for the current fiscal year.

As of last March, Sonali Bank had a capital shortfall of Tk 25.58 billion, Rupali Bank Tk 6.38 billion, BASIC Bank Tk 29.62 billion, Bangladesh Krishi Bank Tk 72.53 billion and Rajshahi Krishi Unnayan Bank Tk 7.79 billion.  

The funds will be fed to banks in the forms of different trades, said a source with the direct knowledge on the matter.

"We have sought an allocation of Tk 26 billion from government for BASIC to reduce its capital shortfall. A huge amount of funds is an urgent need for the bank," Chairman of BASIC Bank Limited Alauddin A. Majid told the FE.

"We are facing trouble to operate the bank's business now. At present, BASIC bank is running its Letter of Credit (LC) business with the help of a third bank," he said.

"We have got the proposal sent by state-owned banks, seeking funds to meet their capital shortfall from the current budget," a senior official of the banking division said.

State-run Sonali Bank, Rupali Bank and BASIC Bank have also proposed issuing bond for replenishing their emaciated capital, he added.