Tk50cr recovered out of Tk13,254cr
Four State-owned Commercial Banks (SCBs) have made little progress in recovering bad loans from their top 20 defaulters, despite repeated warnings from the Bangladesh Bank(BB), as the errant firms gobbled up Tk13,254 crore from the public sector banks concerned.
While experts said lack of good governance and deeply rooted corruption in the process of loan sanctions was responsible for the situation, the top officials at the SCBs said stay orders from the courts held back their efforts to recover money from the defaulters.
The banks are Sonali, Janata, Agrani, and Rupali.
As of June this year, the top 20 defaulters owe Tk13,254 crore loan to four SCBs, according to the latest data of BB.
The banks only recovered around Tk50 crore between January and August this year. Of the total, Sonali recovered Tk1.64 crore and Agrani Tk21.49 crore, sources said.
The defaulting clients are from the garments, real estate, jute, and leather industries, bankers said.
“When we file a case against defaulters, they file writ petitions with courts challenging our case. We need a new law for recovery of bad loans,” Sonali Bank Managing Director Obayed Ullah told the Dhaka Tribune.
He said the number of courts dealing with such default loans should also be increased.
Former Bangladesh Bank governor Dr Salehuddin Ahmed finds lack of good governance and widespread corruption as major reasons for the current dire situation prevailing at the four SCBs.
“The politically appointed bank directors often influence bank officials in the loan sanctioning process, resulting in default loans. In addition, weaknesses, corruption, and lack of experience among a section of bankers, helps create the situation,” he added.
At the beginning of this year, the central bank asked the four SCBs to fix a target of recovering bad loans from the top 20 defaulting companies. Although the banks set targets for recovery, they have failed to come close to the targets.
Every three months BB officials hold meetings with the public sector banks and press them to expedite the return of bad loans from the top defaulters. However, no tangible progress has been made by the banks concerned, a senior BB official said.
As of June, 2018, the amount of bad loans stands at Tk4,000 crore for the top 20 defaulters at state owned Sonali Bank . The bank has about 19,000 cases pending with courts against all defaulters.
Agrani has default loans of Tk1,513.74 crore with their top 20 defaulters.
Agrani Bank managing director Shams-Ul-Islam told the Dhaka Tribune said they had been trying their best to recover the loans and initiatives had been taken in this regard.
The amount was Tk4,963 crore pending with the top 20 defaulting companies for state-owned Janata bank as of June, according to BB data.
According to BB data, massive loan irregularities at Janata pushed up the defaulted loan rate to 21.95% or Tk8,596 crore in June this year, from 14.10% or Tk5,345 crore in December last year.
State-owned Rupali bank has Tk2,778 crore pending with their top 20 defaulting firms.