The Ministry of Finance (MoF) has prepared a package formula to improve the financial health and operational capacity of the largely state-owned Rupali Bank Ltd.
Under the formula, the Bank will be allowed to issue three right shares against one existing shares to increase its paid-up capital while the government itself will issue interest-bearing bondsworth about Tk 5.0 billion against the money the state-owned enterprises (SoEs) and other government organizations owe to the Bank, according to sources.
Besides, around 600 officers will be recruited for Rupali under the package.
"We have finally prepared the package for Rupali to address its longstanding problems relating to capital shortfall, dearth of human resources and non-performing loans,' a top official in the ministry told the FE.
"We at the ministry took a little bit of time since we wanted a lasting solution to the problems Rupali is now facing."
He said the package formula has been finalised last Thursday, which will be placed before Finance Minister AMA Muhith today (Sunday) for approval.
The wants to solve the problems of Rupali in a single package as the problems are longstanding, another top MoF official said.
The major part of the Rupali Bank's classified loan, amounting to Tk. 16.30 billion, as of June 30 last belongs to the public sector entities. Of the classified loans, Tk. 4.97 billion is the principal amount and the rest is accumulated interest, according to the latest estimate of Rupali Bank Ltd.
According to the data, the now-closed Adamjee Jute Mills owes the largest amount of overdue loan, Tk. 7.58 billion, to the Rupali Bank, followed by the Bangladesh Textile Mills Corporation, Tk 1.54 billion, the Bangladesh Agriculture Development Corporation, Tk 1.23 billion, the People's Jute Mills, Tk 1.08 billion, the Bangladesh Jute Mills Corporation, Tk 930 million, the Food Ministry, Tk 484 million, the Crescent Jute Mills, Tk 376 million, the Karim Jute Mills, Tk 312 million, and the Sylhet Pulp and Paper Mills Tk 152 million.
Besides, the Khulna textile Mills owes to the Bank Tk 95.6 million, the Khulna Newsprint Mill Tk 77 million, Bangladesh Aroma Tea Ltd Tk 44.4 million, Bharat Tea Estate Tk 39 million and the National News Publication Tk. 72 million.
Rupali Bank sources said they had to give loans to the SOEs at the insistence of the MoF since the government owns 94 per cent of the Bank's shares.
The MoF at a recent meeting asked the Rupali Bank to submit its total outstanding loans with the SOEs.
The Rupali sought interest-bearing bonds against the outstanding and classified loans of SOEs and other government organisations, amounting to Tk 16.30 billion.
However, the ministry officials said now the principal part of the loan, amounting to about Tk five billion will be provided to the Rupali throughbonds, while the issue of the remaining amount will be settled in the next fiscal year.
Meanwhile, the Bangladesh Bank (BB) gave its opinion favouring the issuance of three right shares against each existing share of Rupali Bank ltd to meet its shortfall in its paid-up capital.
The board of directors of Rupali in last September decided to issue three right shares against each existing share of Rupali Bank ltd to raise its paid-up capital by June 30, 2010, a deadline set by BB for all commercial banks in the country.
Meanwhile, the MoF is planning to offload another considerable portion of share of Rupali through stock exchanges and appoint chief executive officer and other top level posts from the private sector, sources said.
Presently, the government owns 94.55 per cent shake of the Rupali.
As per un-audited quarterly accounts for the 3rd quarter ended on 30th September 2009, Rupali Bank has reported net profit of Tk. 1,109.43 million with EPS of Tk. 88.75 as against Tk. 157.48 million and Tk. 12.60 respectively for the same period of the previous year, according to the information posted on the Dhaka Stock Exchange web site.
Under the formula, the Bank will be allowed to issue three right shares against one existing shares to increase its paid-up capital while the government itself will issue interest-bearing bondsworth about Tk 5.0 billion against the money the state-owned enterprises (SoEs) and other government organizations owe to the Bank, according to sources.
Besides, around 600 officers will be recruited for Rupali under the package.
"We have finally prepared the package for Rupali to address its longstanding problems relating to capital shortfall, dearth of human resources and non-performing loans,' a top official in the ministry told the FE.
"We at the ministry took a little bit of time since we wanted a lasting solution to the problems Rupali is now facing."
He said the package formula has been finalised last Thursday, which will be placed before Finance Minister AMA Muhith today (Sunday) for approval.
The wants to solve the problems of Rupali in a single package as the problems are longstanding, another top MoF official said.
The major part of the Rupali Bank's classified loan, amounting to Tk. 16.30 billion, as of June 30 last belongs to the public sector entities. Of the classified loans, Tk. 4.97 billion is the principal amount and the rest is accumulated interest, according to the latest estimate of Rupali Bank Ltd.
According to the data, the now-closed Adamjee Jute Mills owes the largest amount of overdue loan, Tk. 7.58 billion, to the Rupali Bank, followed by the Bangladesh Textile Mills Corporation, Tk 1.54 billion, the Bangladesh Agriculture Development Corporation, Tk 1.23 billion, the People's Jute Mills, Tk 1.08 billion, the Bangladesh Jute Mills Corporation, Tk 930 million, the Food Ministry, Tk 484 million, the Crescent Jute Mills, Tk 376 million, the Karim Jute Mills, Tk 312 million, and the Sylhet Pulp and Paper Mills Tk 152 million.
Besides, the Khulna textile Mills owes to the Bank Tk 95.6 million, the Khulna Newsprint Mill Tk 77 million, Bangladesh Aroma Tea Ltd Tk 44.4 million, Bharat Tea Estate Tk 39 million and the National News Publication Tk. 72 million.
Rupali Bank sources said they had to give loans to the SOEs at the insistence of the MoF since the government owns 94 per cent of the Bank's shares.
The MoF at a recent meeting asked the Rupali Bank to submit its total outstanding loans with the SOEs.
The Rupali sought interest-bearing bonds against the outstanding and classified loans of SOEs and other government organisations, amounting to Tk 16.30 billion.
However, the ministry officials said now the principal part of the loan, amounting to about Tk five billion will be provided to the Rupali throughbonds, while the issue of the remaining amount will be settled in the next fiscal year.
Meanwhile, the Bangladesh Bank (BB) gave its opinion favouring the issuance of three right shares against each existing share of Rupali Bank ltd to meet its shortfall in its paid-up capital.
The board of directors of Rupali in last September decided to issue three right shares against each existing share of Rupali Bank ltd to raise its paid-up capital by June 30, 2010, a deadline set by BB for all commercial banks in the country.
Meanwhile, the MoF is planning to offload another considerable portion of share of Rupali through stock exchanges and appoint chief executive officer and other top level posts from the private sector, sources said.
Presently, the government owns 94.55 per cent shake of the Rupali.
As per un-audited quarterly accounts for the 3rd quarter ended on 30th September 2009, Rupali Bank has reported net profit of Tk. 1,109.43 million with EPS of Tk. 88.75 as against Tk. 157.48 million and Tk. 12.60 respectively for the same period of the previous year, according to the information posted on the Dhaka Stock Exchange web site.
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