The Bangladesh Bank building at Motijheel Mehedi Hasan/ Dhaka TribuneStock dividend linked to banks’ capital solvency under the Covid-19 emergencyBangladesh Bank on Monday barred banks from disbursing any dividend for their shareholders before September, aiming to keep the financial health of banks unhurt from the economic hit of coronavirus emergency. It also says banks capable of keeping a minimum 12.25% CAR without the deferral facility taken from Bangladesh Bank for 2019 to meet other expenses including provision saving, will be able to declare 15% dividend with a maximum 7.50% in cash dividend. Furthermore, banks those are able to keep a minimum 11.25% capital or more with the deferral facility taken from Bangladesh Bank for 2019 to meet other expenses including provision saving, could declare a total of 10% dividend with a maximum of 5% in cash dividend. According to Bangladesh Bank guidelines on risk-based capital adequacy, banks have to maintain a minimum capital adequacy ratio (CAR)— which is a bank’s capital reserve to cover their risk exposure — of 12.50% by 2019, in line with the BASEL III requirement. At the end of December last year, 12 banks faced capital shortfall to Tk23,612.43 crore, as per central bank data.

Source: Dhaka Tribune May 11, 2020 14:48 UTC