Strict dividend policy: cash dividend banned for low-capital banks

PNN News Desk, Dhaka

Bangladesh Bank has issued stricter instructions regarding dividend declaration and distribution to strengthen the banking sector.

According to the new directive, commercial banks with paid-up capital below 20 billion taka will not be allowed to declare any cash dividend this year.

The central bank issued a circular on Saturday stating that this decision aims to strengthen capital bases amid global and domestic economic challenges.

Banks that meet all regulatory requirements may distribute up to 50 percent of their total dividend in cash.

This rule will take effect from the financial year ending December 31, 2026.

A senior Bangladesh Bank official said the decision aims to protect depositors’ interests and ensure financial stability.

Experts believe this restriction will help banks retain more profit in capital reserves and improve long-term financial resilience.