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Rupali Bank's auditor flags Tk 14,014cr provision shortfall
The auditor of Rupali Bank PLC has issued a qualified opinion along with an emphasis of matters paragraph in its report for the year ending on December 31, 2025, flagging a massive shortfall in required provisions and multiple regulatory non-compliances, according to a disclosure made by the state-owned bank to the Dhaka Stock Exchange (DSE) on Monday.
The auditor said the bank failed to recognise required provisions amounting to Tk 14,014.48 crore as of December 31, 2025, with the shortfall spread across loans, advances and off-balance sheet items (Tk 11,216.62 crore), the employees' pension fund (Tk 1,886.99 crore), investments (Tk 493.49 crore), other assets and inter-branch accounts (Tk 467.49 crore), and balances with Bangladesh Bank and other banks and financial institutions.
The auditor noted that non-recognition of this shortfall has a consequential impact on the bank's disclosed net profits, liabilities and shareholders' equity.
Bangladesh Bank, through a letter dated April 30, 2026, authorised Rupali Bank to prepare its financial statements without recognising the provision shortfall in the absence of sufficient profit, a move the auditor said is not consistent with relevant IFRS accounting standards.
In the emphasis of matters section, the auditor pointed to several other compliance gaps. The bank's Share Money Deposit of Tk 679.99 crore has not been converted into share capital within the six-month window required by an FRC circular. Its paid-up capital stood at Tk 487.93 crore against a minimum regulatory requirement of Tk 500 crore under a BRPD circular.
The auditor also flagged that the bank's Capital to Risk-Weighted Assets Ratio stood well below the required 12.50 percent threshold, at 2.88 percent on a solo basis and 2.94 percent on a consolidated basis, against the mandated minimum total capital plus capital conservation buffer.
Additional observations covered lease liabilities and right-of-use assets recognised under IFRS 16, a need to retranslate foreign currency balances held with Bangladesh Bank in line with IAS 21, unreconciled suspense account balances, and an unresolved rationale for manual interventions in the bank's loan classification (CL) reporting under a Bangladesh Bank circular, reports UNB.