BB to watch over granting big loans

A recent meeting of the central bank’s supervision committee came up with the decision of “strong monitoring” over the commercial banks’ sanctioning of large loans to single borrowers, official sources said. The central bank already conveyed it to the Bank and Financial Institutions Division and requested it to take necessary steps in this regard. Bangladesh Bank will issue a circular on the matter to keep the banks’ large credit programmes secure. According to the meeting decision, the authorities concerned of the commercial banks will review the credit risks of the banks’ branches in sanctioning big loans. The commercial banks will also ensure security of loan disbursement and give importance on it, the meeting decided. The big loans are more than 80% of total loans disbursed by the country’s commercial banks. In March 2015, Bangladesh Bank embarked on a two-step programme to ensure that the loan situation of the sector’s large borrowers do not go out of hand but that programme did not work out. As of June of the same year, a number of only 60 borrowers owed a total of Tk60,000 crore to the country’s commercial banks. In 2013 Bangladesh Bank launched a software to increase large loan monitoring after the banking sector was rocked by a number of high-profile loan scams.