• MARCH 28, 2023

Banks to pay 17.5 pc cash dividend

Cash Bundle COURTESY

  • Bank
  • BBC, Washington
  • Published: 18 Mar 2021, 10:22 AM

Bangladesh Bank has issued a circular to the listed banks to pay a 35% dividend including 17.50% cash to the shareholders in the last financial year.

The circular issued on Tuesday has been sent to the chief executives of all commercial banks in the country.

As per previous instructions, there was an opportunity to pay 15 percent cash and a 15 percent bonus dividend. Under the new decision, banks will be able to pay 18.50 percent in cash. The circular said the bank would be able to declare a total dividend of 35 percent, including 17.50 percent in cash, taking into account the financial capacity of the bank and the return of investors on the bank's shares.

 It further states that banks are not subject to the deferral facility previously availed by Bangladesh Bank to meet other expenses including provisioning, or without availing any such deferral facility in the calendar year under consideration. 

Earlier on Monday, the capital market regulator Bangladesh Securities and Exchange Commission (BSEC) and Bangladesh Bank decided to increase the rate from five percent to 35 percent.

In the first week of February, Bangladesh Bank set a maximum limit of 30 percent on the bank's dividend through a notification. In the last week of this month, the maximum dividend limit for NBFI (non-bank) financial institutions was fixed at 15 percent. This directive of Bangladesh Bank has a strong impact on the capital market. Shares of banks and financial institutions fall sharply. All in all, the market became volatile.

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