Dhaka, Bangladesh (BBN) – National Bank of Pakistan (NBP) has injected US$54 million (around BDT 4.20 billion) in Bangladesh to meet its capital shortfall in line with the Basel-II framework, officials said.

“The NBP is now a capital surplus foreign commercial bank in Bangladesh after injecting the fresh fund,” a senior official of the Bangladesh Bank (BB) told BBN in Dhaka on Thursday.

He also said the total capital shortfall of the foreign commercial bank stood at over BDT 3.22 billion as of September 30, 2014.

BB Governor Dr. Atiur Rahman earlier asked the top management of the NBP to meet the capital shortfall by December 15 this year.  
Currently, the NBP, one of the largest commercial banks in Pakistan, is running its operations with four branches in Bangladesh.

Talking to the BBN, another BB official said such injection of fresh fund will help to improve the overall capital adequacy ratio (CAR) of all banks in the next quarter this calendar year.

The CAR of all banks came down to 10.57 per cent in the third quarter of this year from 10.68 per cent a quarter ago, the BB data showed.
The overall CAR of all banks will improve in the coming months if the government injects fresh fund to minimise capital shortfall of the state-owned banks under its recapitalisation programme, the BB official added.
The central bank of Bangladesh earlier fixed the CAR at minimum 10 per cent considering the country’s overall risk factors in the banking sector.
Under the Basel-II provision, the standard requirement of the CAR is minimum 8.00 per cent.
Bangladesh is now implementing the Basel-II accord to consolidate the capital base of banks in line with the international standards.
It has been prepared on the basis of three pillars: minimum capital requirement, supervisory review process and market discipline.
Three types of risks – credit risk, market risk and operational risk – have to be considered under the minimum capital requirement.

BBN/SSR/AD-11DEc14-11:35 pm (BST)