Bangladesh Bank will revamp its large loan monitoring software to strengthen further its supervision on the banking industry.
It launched the software in February this year after the banking industry was rocked by a number of high-profile loan scams – the one involving the Sonali Bank and the Hall-Mark Group being on top.
Large loan monitoring software will be stepped up to monitor exposure to large business groups and ensure that there is an equitable distribution of credit for all industry sizes, according to its latest monitory policy.
It said close monitoring of SMEs (small and medium enterprises) and agricultural credit will help ensure that these loans are going to the intended clients and having their desired impact.
With the help of this system, customers’ current financial condition, total credit position, classified loan amount, loans’ merit, loan concentration to any sector, funded and non-funded loan situation can be instantly learnt, said an official.
“Over the years, the banking sector has been expanded many times. So it has become inevitable now to gear up supervision on the sector by using technology,” he said.
Gaining experience from the past, it has been noticed that concentrated loan is the main cause for the damage of the banking business, he said, referring to the global financial sector that falls at risk due to failure of big borrowers.
Lion share or 60% of total asset of the country’s commercial banks is credit and concentrated in advanced sector. Of which, 25-30% of the total loan is big ones, according to BB.
Considering risks in the face of aftermath of global recession and the country’s reality, the central bank has brought changes strategically in monitoring the banking industry.
Loan sanctioned to any individual or entrepreneur or any organisation of a group amounting to 10% or more of a bank’s total capital would be monitored using the software, according to the central bank.
The BB will also be able to forecast the liquidity condition in the banking sector using the software.