Paid-up Capital and Reserve Fund of bank-companies. Ref: BRPD Circular Letter No. 11 dated 14-Aug-2008.

Chief Executive Officer
All Banking Companies working in Bangladesh.

Paid-up Capital and Reserve Fund of bank-companies.

On the above subjecet, this to inform that, with a view to strengthen financial sustainability of banking companies working in Bangladesh, empowered by the proviso under section 13(2) of the Banking Companies Act, 1991, in consultation with the government, Bangladesh Bank through the notification no. BRPD(R-1)717/2008-511 dated 12 August 2008 has refixed that the minimum Paid-up Capital and Reserve Fund of banking companies shall be Taka to 400 crores, of which the Paid-up Capital shall be not less than Taka 200 crore.

02. To raise Paid-up Capital and Reserve Fund, as mentioned in the notification, banks shall have to follow instructions as stated below:

(i) Banks shall have to fulfill the required Paid-up Capital and Reserve Fund of Taka 400 crore within 3 years from the notification date i.e. within 11 August 2011 and the paid-up capital will be not less than Taka 200 crore.

(ii) To maintain required capital Banks may raise the Reserve by keeping profit after tax by issuing right shares or IPO, if applicable.

(iii) Any Bank having shortfall of required capital and reserve will not pay or declare cash dividend.

(iv) Foreign Banks will have to meet the capital shortfall by not repatriating the profit or by bringing in additional/Capital from abroad within the stipulated.

(v) In terms raising the capital, bank-company shall take necessary measures to amend their Memorandum and Articles of Association.

(vi) Feasibility of merging with other banks and financial institutions may be considered to ensure the required capital and reserve within stipulated time limit. A copy of notification is enclosed to take necessary action. Please acknowledge receipt. Enclosed: 1(one) pages.


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