Islami Bank to raise capital fivefold amid huge loan defaults
Bangladesh Bank has cleared Islami Bank to raise its authorised capital fivefold to Tk10,000 crore after defaulted loans surpassed Tk1 lakh crore.
Bangladesh Bank has cleared Islami Bank Bangladesh to increase its authorised capital fivefold to Tk10,000 crore from Tk2,000 crore. The decision follows a board proposal approved on 4 November to tackle a severe capital shortage.
The financial pressure comes as the lender's non-performing loans exceeded Tk1 lakh crore, leaving a provision shortfall of Tk85,886 crore. The bank's current paid-up capital stands at Tk1,609 crore, but regulatory rules require paid-up capital to reach at least Tk2,500 crore under the new ceiling.
According to Dhaka Stock Exchange disclosures, implementing the plan requires shareholder approval and clearance from securities regulators. Around 82 percent of the bank's shares, previously linked to S Alam Group, remain frozen under court orders, and issuing fresh capital is expected to dilute that holding.
Source: The Business Standard Photo: One Idea LLC / StockSnap (CC0)
