Bangladesh Bank has restricted banks on declaring dividend before September 30 this year and also on declaring more than 30 percent dividend in order to reduce the liquidity pressure in banking sector against the backdrop of coronavirus fallout.
The Department of Off-site Supervision of the central bank issued this directives to all scheduled banks through a circular on Monday.
It said that the banks can declare highest 30 percent dividend including a 15 percent cash as per their ability maintaining some other obligations.
“The cash dividend should not be distributed before September 30 in 2020”, said the circular.
It said the government has announced different stimulus packages following the coronavirus outbreak in order to overcome the pressure on different indicators of the economy. The packages are now under implementation.
The Bangladesh Bank already introduced two major refinancing schemes to mobile easy funds to implement the stimulus packages for the large industries and small and medium enterprise (SME) sector, the circular mentioned.
It also said it is essential for the banks to keep their dividend undistributed for strengthening their capital base so that they could make due contribution to the economy in the current situation through maintaining adequate liquidity to absorb the pressure in the banking sector.
The BB circular said the new policy was introduced considering the return of the shareholders for the year ending of 2019.