Central bank curbed dividends in financial institutions

Sunbd Desk || Published: 2021-02-24 14:57:42 || Updated: 2021-02-24 14:57:42

After the bank, the central bank has decided to curb the distribution of dividends to financial institutions. From now on, no matter how profitable a company is, it will not be able to pay more than 15 percent cash dividend to its shareholders. The instructions were issued by the Financial Institutions and Markets Department of Bangladesh Bank on Wednesday. The instructions were issued by the Financial Institutions and Markets Department of Bangladesh Bank on Wednesday. It said that no matter how good a company is, the dividend will not exceed the prescribed limit. The letter has already been sent to the managing directors and chief executives of all financial institutions.

According to the decision of Bangladesh Bank, in order to meet the challenges posed by the effects of the global epidemic, it is necessary to follow the cost-effective management process as well as the policy of distributing capital-saving and liquidity-friendly dividends. As a result, from now on, no matter how much profit an organization makes, they will not be able to distribute 15 percent to the shareholders, i.e. more than Rs 1.5 per share as cash dividend.

On the other hand, those who have defaulted loans of more than 10 percent will not be able to distribute any dividend in cash. Some companies have to pay a maximum of 5 percent bonus shares. However, in the meantime, an organization has proposed to declare a dividend of 30 percent or three rupees per share.

At present, the total number of financial institutions listed in the capital market is 23. The directive comes at a time when three companies have declared dividends. Dividends of two of these are within the limits of Bangladesh Bank. However, a company’s dividend is out of bounds. The prescribed limits include IPDC (Rs 20 per share or 12 percent) and BD Finance (Rs 60 per share in cash and 6 percent bonus shares).

However, IDLC’s dividend has been proposed at 30 percent, or three rupees per share. The circular did not say what the company’s dividend would be.

However, it was not finalized when the board of directors declared the dividend. It is finalized after approval at the annual general meeting of the organization. The annual general meeting of IDLC is scheduled for March 31.

Sunbd/NJ

 

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