4 banks must pay Tk26.12 crore in penalty for violating SEC rules
Four banks are facing a penalty of Tk26.12 crore for not providing cash dividends, instead giving bonus dividends only, which is a violation of the rules of the stock market enlistment.
The banks are Arab-Bangladesh Bank or AB Bank, Mutual Trust Bank, One Bank, and First Security Islami Bank Limited.
According to the law, AB Bank will have to pay Tk1.72 crore, Mutual Trust Bank Tk8.94 crore, One Bank Tk5.0 crore, and First Security Islami Bank Tk10.46 crore.
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According to the law, listed companies must pay cash dividends at least equal to bonus dividends. If the bonus amount is more than cash, the entire bonus share will be taxed at the rate of 10%.
As such, the banks will have to suffer the penalty of additional income tax. This Act was enacted in FY2018-19.
The authorities of four banks say that bonus shares are given as dividend profit and this decision has been taken to increase the paid-up capital of the banks. The profit money will further strengthen the bank's capital.
In the year 2022, from January to December, the profit of AB Bank was Tk71.54 crore. From there it has been decided to give a 2% bonus share dividend to the shareholders.
The board of the bank has decided to issue only bonus shares without cash dividends. For this, a penalty of Tk1.72 crore has to be added to the bonus shares of Tk17.22 crore at the rate of 10%.
Mutual Trust Bank like AB Bank, has violated the National Board of Revenue Act by paying only bonus share dividends instead of cash shares. A penalty of Tk8.94 crore at the rate of 10% of Tk89.37 crore is imposed as a penalty under the income tax Act.
One Bank will have to pay a fine of 10% of the profit of Tk49.3 crore of bonus shares, i.e., about Tk5 crore, as the company has only paid bonus share dividends instead of cash dividends.
On the other hand, the total profit of First Security Islami Bank in 2022 was Tk293.93 crore. From there it paid only a 10% bonus share dividend instead of a cash dividend to the shareholders.
The bank's bonus share amounts to Tk104.60 crore. A fine of 10% has been levied above this amount. The penalty amount is stood Tk10.46 crore. The bank authority will have to pay this penalty.
