The Ansar-VDP Unnayan Bank (AVUB) has appealed to the government for full waiver of corporate tax of Tk54 crore on its income as the bank lacks enough funds.
AVUB Chairman Major General Kazi Sharif Kaikobad sent a proposal to Finance Minister AHM Mustafa Kamal last week in this regard, officials of the Financial Institutions Division said.
“The waiver of tax would be better for the bank as it is under consideration of being declared a non-tax entity,” AVUB Managing Director Mohammad Jalaluddin told The Business Standard.
The AVUB is exclusively for marginal Ansar-VDP members and if the government grants the proposal, the members would get more facilities, he said.
The bank for the two auxiliary law enforcement agencies pays corporate tax of 37.5 percent and 15 percent VAT on its income, he added.
Seeking anonymity, an AVUB official said, “The bank has faced capital shortage since its inception. The management is disbursing profit without dividends to its members for lack of necessary capital.
“In this situation, the Ansar-VDP bank has no capacity to pay any corporate tax to the National Board of Revenue.”
The official also said being a specialised but non-scheduled bank – licensed only for specific functions and objectives – the bank can collect deposits only from members of the two auxiliary law enforcement agencies.
The bank needs to depend on the government to raise its capital either in the form of loan or recapitalisation, he added.
The Ansar-VDP bank had been profitable since 2002-2003 and the corporate tax of the bank has accumulated to Tk54 crore till 2018-19 fiscal year, Chairman Major General Kazi Sharif Kaikobad said in his proposal to the finance minister.
At present, the authorised capital (the maximum amount of the capital for which shares can be issued by the company) of the bank is Tk1,000 crore and the paid-up capital (the amount of money a company receives from shareholders in exchange for shares of stock) of the bank is Tk237.58 crore.
However, the amount of issued capital of the bank was Tk400 crore.
The bank has 239 branches and 18 regional offices across the country.
The main objectives of the Ansar-VDP Unnayan Bank are to alleviate poverty of the marginal Ansar-VDP members, women’s empowerment and economic wellbeing by providing banking services to a large number of Ansar and VDP personnel.
The Ansar-VDP Unnayan Bank started operation in 1996 for nearly 61 lakh Ansar and VDP members.
Nearly 2.40 crore people in the country have been benefited indirectly by this state-run specialised bank.