The combined capital shortfall in 24 of the 61 banks in the country has ballooned past Tk1.55 lakh crore in the April-June quarter, a surge of nearly 30% from the previous three months.

All of these have less capital than is authorized to shield against financial shocks.

The surge in deficit in so many banks can be directly attributed to the gradual exposure of the banking sector’s liquidity crisis. Both government and banking authorities kept the crisis hidden to the public eye until the corrupt Awami League government collapsed in a mass uprising in August last year.

Of the 24 affected banks, four are state-owned, two are specialized and 18 are private commercial banks. These banks do not have sufficient buffer against defaults by borrowers, and are also losing confidence of foreign banking partners, borrowers and investors.

Experts believe urgent measures are needed to avert further damages to the banking sector.

FP/MI