BB hikes capital requirement for new banks

New commercial bank will have to ensure Tk 500 crore as paid-up capital instead of the existing Tk 400 crore, Bangladesh Bank said in a circular today.

The new rule will be applicable to the banks, which will apply for licences for opening new bank companies, a central bank official told The Daily Star.

Asked why it was not applicable to the existing banks, he said many banks could not raise their capital base immediately like the state ones, which are struggling to manage their required capital for a long time.

He said the central bank had taken the decision to raise the capital before the coronavirus pandemic, but it did not implement the rule given the business slowdown.

He hinted that the central bank may further raise the capital requirement in the days ahead.

The banking regulator also set a paid-up capital requirement of Tk 125 crore for the digital bank.

The Bangladesh Bank board approved the guidelines for the digital bank on June 14.

The BB official said digital banks would not need huge infrastructures like the traditional ones. So, the amount of paid-up capital for digital banks is lower than the traditional banking financial institutions.