Seven banks, five owned by the government, suffered capital shortfalls worth nearly Tk 154 billion in the current calendar year's second quarter (Q2) alone.
Two state-owned commercial banks (SoCBs) came out from the list of capital-deficient banks during April-June period of this year mainly due to decrease in their classified loans, officials said.
Earlier in the Q1 of this year, the total capital shortfall of the above-mentioned nine banks was over Tk 165 billion.
Of the seven running short of requisite capital, three out of six SoCBs, two of 40 private commercial banks (PCBs) and two specialised banks (SBs) were included in the capital-shortfall list.
Talking to the FE, a senior central banker said those banks faced capital shortfall mainly due to their higher non-performing loans (NPLs).
He also said the banks had kept aside more money from their capital for maintaining provisioning requirement against their classified loans.
The overall capital shortfall of the six SoCBs came down to Tk 46.55 billion in Q2 from Tk 59.66 billion in Q1 of this calendar year. It was Tk 59.93 billion as on December 31, 2016.
However, the capital shortfall of two specialized banks stood at nearly Tk 80.30 billion in the Q2 of this calendar year from around Tk 80.32 billion three months before. It was Tk 78.26 billion in the final quarter of last calendar year.
The capital shortfall of two PCBs came down to Tk 17.88 billion in the Q2 of 2017 from Tk 18.05 billion of the Q1 of this year. It was Tk 17.96 billion in the Q4 of 2016.
The central bank has repeatedly asked the banks for taking effective measures to meet their capital shortfall as early as possible, according to the central banker.
"The overall capital-to-risk weighted assets ratio (CRAR) of all banks will improve significantly if the capital shortfall of the banks, particularly public ones, is met," he explained.
The government had provided nearly Tk 96.40 billion as recapitalisation fund to help out its seven banks, out of eight, in the last four fiscal years, according to the official figures.
The ministry of finance, however, allocated Tk 20 billion as recapitalisation fund for the ongoing fiscal year (FY) 2017-18 on the same ground.
The overall CRAR of all the banks operating in Bangladesh rose to 10.86 per cent in the Q2 of this year from 10.68 per cent three months before. It was 10.80 per cent in the Q4 of 2016.
All PCBs' CRAR was found on average to be 12.18 per cent as on June 30 last while the CRAR of nine foreign commercial banks stood at 23.34 per cent.
But the capital position of public banks is still a matter of grave concern, the BB official said while explaining the overall situation of the state banks.
The CRAR of six SoCBs stood at 6.99 per cent as on June 30 this year while the CRAR of two SBs was in the negative territory at 32.76 per cent, according to the central bank latest statistics.
However, the total regulatory capital rose by Tk 55.35 billion to Tk 899.60 billion during the April-June period of this calendar year from Tk 844.24 billion three months ago.
The total regulatory capital was Tk 837.58 billion in the Q4 of last calendar year.
Bangladesh started implementing the Basel-III for calculation of CRAR of all banks from Q1 of 2015 for consolidating stability in the banking sector.
Under a roadmap to comply with the Basel-III, the banks will have to maintain 11.25 per cent of CRAR including 1.25 per cent capital conservation buffer by the end of December 2017.
The CRAR remains unchanged at 10 per cent while 0.625 per cent capital-conservation buffer has to be included each year.
The banks will have to maintain 11.875 per cent CRAR by 2018. Finally in 2019, it will hit the desired level of 12.50 per cent, according to the roadmap.
The Basel-III is a new global regulatory standard on banks' capital adequacy and liquidity as agreed by the members of the Basel Committee on Banking Supervision.
The third of the Basel Accords was developed in response to deficiencies in financial regulation revealed by the financial crisis of late 2000s.
The Basel-III is set to strengthen bank capital requirements and introduce new regulatory requirements on bank liquidity and bank leverage.