Bangladesh Bank Governor Ahsan H Mansur has said that if a bank’s capital falls below 10% and it incurs provision losses, it will not be allowed to pay dividends or bonuses, and no official will receive a bonus under such circumstances.

He made the remarks while virtually addressing a discussion on Branding Bangladesh, upcoming elections, expatriate participation, and the future economy, organised by the Centre for Non-Resident Bangladeshis (NRB) at a Dhaka hotel on Saturday.

Governor Mansur said, “We are striving to stabilise Bangladesh’s economy. Over the past few years, uncertainties have created instability in the financial system. We are working to reverse this trend, and some progress has already been made. The balance of payments shows a surplus due to a 21% increase in remittance inflows and higher exports despite the crisis.”

He added, “Commission-based trade from higher authorities has decreased, and unofficial channels like hundi have also reduced. Previously, around 30% of expatriate remittances bypassed the formal banking system. Imports have not declined, but prices have decreased. People who used to exploit price differences for money laundering are no longer active, which has reduced expenditure. Good governance is behind this improvement, which has helped increase reserves.”

The governor reiterated, “If a bank’s capital falls below 10% and it suffers provision losses, it cannot distribute dividends or bonuses. No official will receive a bonus if provision losses occur. Loans overdue for three months will be classified as non-performing.”

He also noted that over the past month, the central bank purchased $1 billion from the market, but the price did not rise. “Even though there is no dollar shortage, there is still a scarcity of taka. We are working on inflation management, but this requires time. Prices of rice rose in August, causing slight inflation, but we aim to bring inflation down to 5%,” he said.

Regarding bad loans, the governor said the June report indicates a 30% risk of default. He added that discussions with the government will begin on Sunday (7 September) about consolidating five banks, a move expected to improve performance within one to two years, benefiting both officials and depositors.