Eastern Bank Limited incorporated on 16 August 1992 as a public limited company with the primary objective of carrying out all kinds of banking business in and outside Bangladesh. It was formed by taking over the businesses, assets, liabilities and losses of the erstwhile Bank of Credit and Commerce International (Overseas) Limited (BCCI). Eastern Bank commenced business with four branches and an authorised capital of Tk 1,000 million divided into 10 million shares of Tk 100 each. Tk 600 million has been subscribed and paid up by three different classes of shareholders, namely KA, KHA and GA. The KA-type shares (1.2 million) are those which are fully subscribed by the government of Bangladesh. The KHA-type shares (1.90 million) are fully subscribed by the financial institutions and GA-type shares (2.90 million) are subscribed by the depositors of the erstwhile BCCI branches. The bank is listed with the Dhaka Stock Exchange.

Reserve funds of the bank on 31 December 1999 stood at Tk 1,855.79 million, of which statutory reserves amounted to Tk 301.03 million, other reserves Tk 212.83 million and reserves against pre-takeover loss Tk 1,341.93 million. The bank had a blocked deposit of Tk 1,373.27 million on the eve of the closure of its predecessor. The deposits accumulated in the bank stood at Tk 11,869.8 million on 31 December 2000. The interest paid by the bank on its deposits varies between 7.25% and 9.75%

The loans and advances of the bank totaled Tk 632.40 million in 1993 and rose to Tk 8,141.4 million in December 2000. Most of its loans went to large, medium and small-scale industries in the form of medium and long-term loans and working capital loans. Other lending areas include export servicing, import financing, trade credit, housing, real estate and various other productive activities. Up to December 2000, the bank had financed a total of 257 projects in the field of medium, large, and small and cottage industries. It charged competitive interest rates ranging from 10% to 16% throughout the year 2000. Of its total loans and advances of Tk 8,141.4 million up to December 2000, Tk 668.4 million or 8.21% became classified.

The bank's investments remained confined to government treasury bills and bonds, shares and debentures of companies, and prize bonds. As at the end of 1992, total investment other than lending was Tk 562.27 million, which decreased in 1993 to Tk 330.52 million. Thereafter, there was a consistent increase in the volume of the bank's investment, the total of which amounted to Tk 1,902.56 million at the end of 2000. Total assets excluding off-balance-sheet items were valued at Tk 21,675.8 million on 31 December 2000. The bank has extensive participation in off-balance-sheet activities that amounted to Tk 6,210 million in December 2000.

Except the 5 months of the first year of its operations (from 16 August to 31 December 1992), the bank had regularly earned profits up to December 2000. But it had to bear and offset a pre-takeover loss of Tk 3,138.56 million since 1992. Gradual offsetting of that loss took a long time. Maintaining provision funds for the classified loans and advances accrued to the past in BCCI also seriously affected the overall profitability of the post-takeover Eastern Bank Limited.

The management of the bank is vested in a board of directors. In 2000, the bank had a total of 561 employees and 22 branches in different places in the country. [S M Mahfuzur Rahman]