AHSAN HABIB

Only one bank will be able to pay cash dividends next year after the Bangladesh Bank barred lenders with paid-up capital below Tk 2,000 crore from making such payouts.

In a circular issued yesterday, the Bangladesh Bank (BB) said the move is aimed at strengthening the capital base of the banking sector. It also seeks to improve the ability of commercial lenders to absorb future risks amid a challenging global and domestic financial environment.

Only BRAC Bank and National Bank PLC (NBL) meet the higher paid-up capital threshold among listed lenders.

However, National Bank remains in significant losses, leaving BRAC Bank as the only institution effectively positioned to meet the requirement for cash dividend payments.

Even for banks that meet the paid-up capital threshold, the central bank has capped cash dividends at 50 percent of the declared payout, with the remainder to be issued as stock dividends.

The new rules will take effect from dividend declarations for the year ending December 31, 2026 and onwards, according to the Supervision Policy and Coordination Department of Bangladesh Bank.

The policy is expected to affect most listed banks, raising concerns among market participants about shareholder returns.

While the measure may improve the resilience of the banking sector in the long run, it is likely to reduce flexibility for banks that are otherwise financially stable.

Mashrur Arefin, chairman of the Association of Bankers, Bangladesh (ABB), the apex body of the country’s commercial bank executives, said, “This is a good move towards strengthening the capital base of the banks.”

He said a few banks with weak capital bases did take cash out in the past. But the shareholders of healthy banks will now suffer. “That’s not good.”

The ABB chairman said the dividend rule should instead