Written by The Banking Post
Bangladesh Bank has introduced stricter dividend rules for banks, allowing only lenders with at least Tk 20 billion in paid-up capital to declare cash dividends from 2026 onward.
The new policy reflects the central bank’s growing focus on strengthening capital buffers and improving the banking sector’s ability to absorb economic shocks amid rising financial stress and global uncertainty.
The directive, issued Saturday by Bangladesh Bank’s Supervisory Policy and Coordination Department, will take effect from the current calendar year and apply to dividend declarations for 2026.
According to the circular, the move is aimed at strengthening the capital base of commercial banks and enhancing resilience against both domestic and international economic risks.
Industry insiders said the policy could accelerate consolidation in the banking sector and encourage the emergence of larger, financially stronger institutions.
A review of data available on the Dhaka Stock Exchange suggests that among the country’s 36 listed banks, only BRAC Bank currently meets the Tk 20 billion paid-up capital requirement.
Sommilito Islami Bank, formed through the merger of five Shariah-based banks, also appears to qualify, although the bank is yet to appoint a managing director following the merger process.
Banking sector insiders said stronger capital buffers have become increasingly important for protecting banks from economic shocks and maintaining financial stability.
They also believe the central bank is moving toward a banking structure dominated by fewer but financially stronger banks rather than many smaller lenders with limited capital strength.
Shah Md Ahsan Habib, professor at the Bangladesh Institute of Bank Management (BIBM), said the policy signals a clear strategic shift by the regulator.
“This is most probably an indication that the central bank wants stronger and larger banks, as there is no alternative to adequate capital in absorbing financial shocks,” he said.
He added that many local banks still operate with significantly weaker capital bases compared to banks in peer economies, making capital strengthening more critical amid ongoing economic uncertainty.
