The state-owned Rupali Bank has taken a move to increase its authorised capital to Tk 25 billion aiming to make its capital base sound and strong, officials said.
Besides, the bank also wants to raise its paid-up capital through issuance of rights shares, they added.
Currently, the paid-up capital of the bank is over Tk 4.14 billion. Its authorised capital stands at Tk 7.0 billion now, a senior executive officer of the bank said.
In the first week of the current month, the Rupali Bank Limited (RBL) managing director and CEO Md. Obayed Ullah Al Masud has sought approval from the financial institutions division (FID) in this regard.
The FID has asked the finance division for taking the required steps or giving necessary consent in this connection recently.
When contacted, the RBL MD said "before COVID-19 pandemic, the government decided to enlist three state-owned banks on the bourses by September next as well as offloading more shares of another listed state-owned bank.
"We were supposed to enhance the volume of offloaded shares up to 25 per cent from the existing 10 per cent within that period."
He, however, said "It will not be a wise decision to offload shares in the stock market during the on-going COVID-19 pandemic. So, we are now interested in the process of issuance of rights shares instead of offloading shares as the Rupali Bank's share price decreased due to the impact of coronavirus disease."
Two years ago, the bank had proposed to the government for taking permission to issue rights shares to increase its paid-up capital. Again, it has sought approval in this regard, according to the bank's document.
The bank is now listed on the two bourses. Presently, 90.19 per cent shares of the bank are owned by the government while the rest 9.81 per cent shares by the institutions and general public.
The bank has recently sought approval for issuing two rights against existing one rights share, the senior official of the RBL said.
The paid up capital would stand at over Tk13.0 billion if the bank is allowed to issue rights at a ratio of two rights shares for existing one rights share at Tk 30 each, including Tk 20 as premium, he added.
The state-run bank is lagging behind than other banks due to less single borrower exposure limit. The bank is the only state-owned bank listed on both the bourses, the official mentioned.
The bank can't calculate the fund that received from the government to meet the capital shortfalls due to listed with the capital markets. It can only raise its paid-up capital through the issuance of rights shares, they also said.
On Monday, per share of Rupali bank was sold at Tk 24.40 against the face value of Tk 10. It was Tk 33.5 on February 16, 2020.
The RBL earned Tk 1.31 billion as operating profit in the first six months of this calendar year, according to the provisional figure of the bank.
There are 573 branches of the bank across the country.
