BASIC Bank seeks to raise its authorised capital
Rezaul Karim | Wednesday, 22 June 2016
Scam-hit BASIC Bank has sought approval from the finance ministry for increasing its authorised capital to Tk 55 billion from existing Tk 25 billion, officials said.
Khondoker Md Iqbal, managing director of the bank, in a letter sent to the finance ministry sought the approval, they added.
The board of directors of the bank in its 385th meeting decided to raise the authorised capital from existing Tk 25 billion to Tk 55 billion, according to the bank data.
The meeting also decided to change the face value of its ordinary shares to Tk 10 from Tk 100 each. The proposal will be placed before the 27th Annual General Meeting (AGM) of the bank scheduled for July 14 next.
At present, the paid-up capital of the bank is Tk 10.89 billion. However, the bank received Tk 16 billion in two instalments from the government last year to replenish its capital shortfall.
The bank was also provided with funds by the government earlier to meet its capital shortage.
Managing director Khondoker Md Iqbal could not be reached for his comments despite repeated attempts over phone.
The bank has requested the Bank and Financial Institutions Division under the finance ministry to make available more capital either in cash or other form amounting to Tk 26 billion to meet its capital shortfall, a source concerned said.
In recent years, loans were sanctioned without following rules properly which resulted in increased volume of classified loan, negative shifting of the level of classified loan and price decline in collateral given against loans, according to a senior official of the bank.
This is why, he said, the amount of provision has increased against classified loans.
Besides, the bank has an adequate amount of liquid money but foreign banks and financial institutions are not cooperating in banking affairs of BASIC Bank as it has capital shortage, he mentioned.
As a result, he said, the bank is now facing difficulty in providing the customers with foreign trade-related services. Foreign trade is one of the main ways of earnings for any banks, but BASIC Bank now fails to do it because of its image crisis caused by loan scam.