Bangladesh Bank (BB) has issued guidelines for declaring dividend against shares to strengthen the financial health of the country’s embattled banking sector and protect depositors.
The central bank issued a circular today to this end.
Under the new guidelines, banks that have taken a deferral facility from the central bank to maintain provisioning requirements will also be barred from paying dividends from 2024 onwards.
Additionally, banks with non-performing loans (NPLs) exceeding 10 percent of their total loans will not be able to declare dividends to shareholders for 2025.
The BB circular said that lenders will be barred from declaring dividends if a penalty or fine is imposed due to a shortfall in the CRR (Cash reserve ratio) and SLR (Statutory liquidity ratio).
Moreover, cash dividends can only be paid from the profits of the calendar year, but no cash dividends can be distributed from the previous accumulated profits.
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