The Bangladesh Bank (Cenbank) has rejected the five-year capital recovery action plans submitted by four major state-owned commercial banks—Agrani, Janata, BASIC, and Rupali—labeling their proposals to fix their significant capital deficits as "unrealistic."
Capital Shortfall: Four state banks collectively face a combined capital shortfall of Tk31,000 crore as of December 2024.
Bangladesh Bank Mandate: The banks were instructed to submit a five-year plan to rectify this deficit by 2029.
Provisioning Issue: While Sonali Bank and Bangladesh Development Bank Ltd (BDBL) faced a provisioning shortfall of Tk4,763 crore, they currently show a capital surplus (Tk167 crore combined) due to regulatory provision forbearance.
Sector-Wide Deficit: The overall banking sector's capital shortfall has sharply increased to over Tk1.55 lakh crore as of June this year, with 24 out of 61 banks failing to meet minimum capital requirements. Rejected Individual Bank Plans:
|
Bank |
Dec 2024 Capital Shortfall |
Proposed 2029 Shortfall Reduction |
Key Issue |
Cenbank Action |
|
Agrani Bank |
Tk7,692 crore |
Tk6,245 crore reduction |
Posted a net loss of Tk937 crore in 2024; plan requires steep, unfeasible profit increase. |
Plan rejected; asked for revision based on financial realities. |
|
BASIC Bank |
Tk8,621 crore |
Tk5,364 crore reduction |
Has posted continuous net losses (Tk863 crore in 2024); requires unlikely improvement. |
Preparing a "realistic roadmap" to restore profitability. |
|
Janata Bank |
Tk10,700 crore |
Projected to increase to Tk20,600 crore |
Reported net losses of Tk3,071 crore in 2024 and Tk3,000 crore in H1 2025; projections are highly questionable. |
No comments provided by the bank. |
|
Rupali Bank |
Tk3,970 crore |
Modest reduction to Tk2,991 crore |
Submitted a modest and realistic plan, projecting limited reduction in both capital and provisioning shortfall. |
Plan submission noted as modest/realistic. |
Better Performing Banks:
Sonali Bank: Plans to expand its capital surplus (Tk64 crore) to Tk5,842 crore by 2029. Has been profitable for three consecutive years (Tk1,888 crore total).
BDBL: Plans to increase its capital surplus (Tk103 crore) to Tk397 crore by 2029.
Economists emphasize that structural weaknesses cannot be solved by profit growth alone. They advocate for comprehensive reforms, including: Balance-Sheet Restructuring, Aggressive NPL (Non-Performing Loan) recovery via specialized teams and fast-tracking legal cases, Government recapitalisation, wider use of One-Time Settlement schemes, Issuing AT1 or Tier-2 bonds and asset revaluation.
