Finance Minister AHM Mustafa Kamal said on Monday that non-performing loans (NPL) in state-run scheduled banks decreased slightly in June compared to December last year and March this year.
"NPL in state-owned banks reduced slightly in June. It is a good sign. I think the country's financial sector is on the right track with regard to NPL management," AHM Mustafa Kamal told journalists at a briefing at his secretariat office in the evening.
The briefing followed a hours-long meeting between the finance minister and the chairman of boards and managing director and chief executive officers (CEOs) of state-owned banks.
"I told you on the very first day as finance minister that NPL would not rise any more. It didn't rise," he added.
The finance minister said that an interim assessment was carried out by banks to find possibility of reducing NPLs. "This is a part of round-the-year supervision, monitoring and evaluation. This type of assessment will continue. We will give you update," he told reporters.
The finance minister provided data of NPL in state banks.
According to data, Sonali Bank's NPL came down to 25% in June from 29.35% in March this year and 30.38% in December 2018. Janata Bank's NPL dropped to 35.18% from 37.32% in December last year though it had risen higher to 43.97% in March this year. Agrani Bank's NPL fell to 14.41% in June this year from 16.65 % in March and 20.25% in last December.
Data shows that the status of NPL remained unchanged at Rupali Bank, BASIC Bank and BDBL.
At end of March this year, the total volume of NPL at the state-run banks was around Tk54,000 crore.
Govt stance on single digit lending rates
The finance minister also reiterated his government's stance on reducing lending rate to single digit immediately with a view to minimizing risks of fresh NPL.
He said NPL was the consequence of high interest rate. "High interest for loan causes no benefit for banks and clients. We want a 'win-win' situation for both," he said.
The finance minister said state-owned banks already implemented the government's directive.
Asked whether it was made nine percent for loan and six percent for deposit, the finance minister replied: "It is a single rate for loan, which is nine. Banks will find a viable rate for deposit."
The finance minister's stance on bringing down lending rate to single digit appeared to be unilateral as CEOs of different banks told media the previous day that the government's idea was impractical considering the current perspective of the financial sector. They spoke to media after a meeting with Bangladesh Bank (BB) governor on Sunday.
Actions to be continue against willful 'loan defaulters'
The finance minister said actions would continue against those who took loans from banks and became defaulters intentionally despite having ability and scope to repay or obtained loan/s by forged documents. "They will be punished. And, the process has started already in light of the existing laws. It does not matter whether they keep the money in the country or sent abroad (flown away)," he warned.
