Bangladesh Bank would incorporate a provision in its corporate social responsibility policy now being prepared to prevent banks from diverting CSR funds to terrorist or militant financing. A directive in this regard was issued during the third meeting of the Anti-Militant Financing Task Force at the home ministry last month. The central bank also explained at the meeting as to why money from loan default compensation funds, especially of the Islamic banks, could not be used for CSR purposes. The compensation funds are created from fines that banks collect when borr...

Most of the banks have sufficient capital buffer to absorb adverse shocks and still maintain the sector's overall capital adequacy ratio (CAR) above the minimum requirement, the central bank's most recent stress tests found. The exercise, conducted by the Financial Stability Department on data from the April-June quarter of this year, looked at the impact of different stressed situations on banks' capital. The minimum capital requirement for scheduled banks is the greater of the two: 10 percent of risk-weighted assets or Tk 400 crore, reports the Daily Star. At the end of June, the sector's CAR stood at 10.68 percent, above the minimum regulatory requirement of 10 percent.