The government has allocated Tk2,000 crore to state-owned banks as recapitalisation funds for the next fiscal year, so they can meet the capital shortage created by loan defaults.

Finance Minister AMA Muhith made the declaration in his speech on the national budget for FY2017-18 on Thursday at Jatiya Sangsad.

Regarding measures to help prevent future capital shortages for state-owned banks, the minister said: “We have started a computerised system to manage our financial sector along with bringing about significant changes to its legal framework.

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“In addition, the state-run commercial banks have been brought under the core banking solution system. The process of formulation and amendment to various laws, rules, regulations, etc, regarding the Finance Company Act and bank management is in progress.”

Muhith added that the process of forming a council under the Financial Reporting Act, enacted to promote transparency, accountability and international standards of financial reporting, was in the final stage and the chairman of the council had already been appointed.

In the outgoing fiscal year, the government disbursed Tk2,000 crore to state-owned banks, with Basic Bank getting Tk1,000 crore from the allocation in the revised budget.