Bangladesh Bank sets Tk 20bn capital limit for cash dividends

Institutions failing to meet the requirement are instructed to issue bonus or stock dividends instead of cash payouts

Bangladesh Bank (BB) has imposed new restrictions on the distribution of cash dividends by commercial banks.

Under the new directive, banks with paid-up capital of less than Tk 20 billion will not be allowed to pay any cash dividends.

The rule will come into effect from the 2026 financial year-end dividend declarations.

The central bank issued the instruction on Saturday to the chief executive officers of all scheduled banks.

In the same circular, BB also capped cash payouts at a maximum of 50 percent of the declared dividends.

Most banks -- except a few -- have paid-up capital below Tk 20 billion.

Cash dividend payments will effectively be restricted for the majority of banks, with institutions failing to meet the requirement instructed to issue bonus or stock dividends instead of cash payouts.

The central bank said the decision has been taken to strengthen the capital base for banks and enhance their capacity to absorb future risks amid evolving global and domestic economic conditions.

It also said other instructions from an earlier circular dated Mar 15, 2026 on dividend declarations will remain in force.

Earlier, in a circular issued on Mar 13, 2025, the central bank had set dividend distribution limits, taking into account capital adequacy, non-performing loan ratios and provisioning requirements.