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This time, Bangladesh Bank stopped the bank’s dividend distribution. As a result, banks will not be able to distribute 2019 cash earnings before September 30 of this year. In addition to this, Bangladesh Bank has also specified the amount of earnings that a bank can give. Bangladesh Bank has issued a notice about it on Monday.
He said that those who have already declared earnings should be suspended and amended if they do not comply with the new rules.
According to the notice, banks that have not taken advantage of any delay to secure central bank security reserves and are able to save 12.5 percent of capital will be able to pay a maximum benefit of 30 percent, of which 15 percent it will be in cash. The capital conservation buffer for these banks should be two and a half percent.
Similarly, those who can save 11.25 percent to 12.5 percent of capital, including the capital conservation buffer, without taking advantage of any central bank benefits, will be able to make a profit of 15 percent from which 8 percent is in cash. By adjusting the central bank facility for protection of security reserves and capital, including capital conversion buffer, is greater than 11.25 percent, you will be able to make a maximum profit of 10 percent, in which case 5 percent in cash.
And if the facility taken from the central bank is adjusted and the minimum reserve capital is 10 percent, the shares of 5 percent will be able to make a profit. However, each bank has to get approval from the central bank before declaring earnings.
Bank officials said the directive would prevent most Islamic banks and at least 10 conventional banks from making a profit. This is because these banks cannot hold security reserves and obtain special benefits from the central bank each year. You have taken the same advantage again, someone is in the process of taking.
Bangladesh Bank had provided the opportunity to distribute dividends with special consideration for so long. This time it stopped suddenly due to the coronavirus. As a result, stock market investors will face losses. Because 80 percent of the bank’s shares are held by ordinary investors.
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