The government has decided to raise the Probashi Kalyan Bank's authorised and paid-up capital to Tk 20 billion and Tk 13 billion respectively, aiming to bolster its financial base and enhance the loan disbursement capacity.
The volume of the authorised capital of the bank currently stands at Tk 5.0 billion and the paid-up capital at Tk 5.0 billion, according to sources.
A total of Tk 13 billion has already been invested as capital by the government (Tk 5.25 billion) and the Wage Earners Welfare Board (Tk 7.75 billion).
The government has given the go-ahead to increase the capital of PKB for the issuance of ordinary shares against government equity and wage earners' welfare board, an officer concerned of the bank said.
According to section 8 under the Probashi Kalyan Bank Act-2010, it is supposed to provide 5.0 per cent and 95 per cent initial capital from the government and the Wage Earners Welfare Board (WEWB).
The initial paid-up capital was Tk 1.0 billion. It was later increased to Tk 5.0 billion.
Of the amount, Tk 250 million (5.0 per cent) and Tk 4.75 billion (95 per cent) was provided by the government and the WEWB respectively.
The bank already issued 250 million and 4.75 billion ordinary shares in favour of the government and the WEWB respectively.
The WEWB has to provide Tk 3.0 billion more to the PKB. Of the amount, it has already provided Tk 2.25 billion and will provide the remaining Tk 750 million to the bank.
Earlier, the PKB sought approval from the Financial Institutions Division (FID) in this regard.
On September 05, the FID under finance ministry approved the bank's proposal.
On the other hand, the government provided Tk 5.0 billion as equity to the PKB to meet its capital deficit in 2020 and 2021.
Of them, the bank will issue 50-million shares to the value of Tk 100 each share within 31 December 2024.
When contacted, PKB managing director Md Mazibur Rahman said had the paid-up capital been increased its capital structure would be strengthened.
Even the loan disbursement capacity of the bank would be boosted, he told the FE.
The demand for loans operated by the PKB is increasing day by day. So, its capital base has been fortified, according to an FID official.
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