The ministry of finance (MoF) has instructed the state-owned commercial banks (SoCBs) to submit their business plans to address their problem of capital inadequacy by October, sources said.

Until March 2013, the four state-owned banks had a shortfall, to the tune of Tk 96.42 billion, in aggregate requirement for their capital. Such shortage in case of Sonali Bank stood at Tk 52.44 billion, for Agrani Bank, Tk 21.20 billion, for Rupali Bank, 11.64 billion, and for Janata Bank, Tk 11.14 billion.

The MoF asked the banks to mention, in the business plan, the status of pursuing the conditions of memoranda of understanding (MoU) that they signed with the central bank, the stage of automation of banking activities, realisation of money in cash from the top 20 defaulters, stress test reports, and updated position for preparation of their respective liquidity risk management policy.

The banks were also asked to inform about the status of progress relating to setting up of risk management units in their respective financial institutions. Furthermore, they were directed to provide updated reports about their respective progress in pursuit of the guidelines of the Bangladesh Bank about core risk management. The SoCBs were also told to furnish information to the MoF about the steps that they had taken to settle the pending loan-default cases and audit disputes and to help reduce the burden of their respective non-performing loans.

In the letter sent to the managing directors and the chief executive officers (CEOs) of the banks, the MoF asked for submitting their respective time-specific plans.

Earlier, at a meeting at the MoF conference room, Finance Minister AMA Muhith expressed resentment over poor performance of state-owned banks about improving their operational conditions.

Transparency and good governance, he observed at the meeting, are yet to be ensured in the state-run banks due to the failure of their automation in time. This has been hindering efforts for providing proper services by them to their customers, he noted.

Mr Muhith asked the banks to expedite actions on core banking solutions on a priority basis from the fund given by the government for their recapitalisation.