Bangladesh Bank (BB) governor Fazle Kabir on Wednesday asked state-owned banks not to be over cautious in sanctioning fresh loans in fear that such loans might become defaulted.
The central bank governor gave the instruction as he found many Sonali Bank officials were too wary of granting new credit after the Hallmark Group loan scam.
Kabir was speaking at the annual conference of the state-owned Sonali Bank Limited held at the city’s Bangabandhu International Conference Centre.
Constant decline in credit flow to the private sector that plunged to 9.2% in January this year, far below the central bank projected 14.8% growth in FY20, prompted Kabir to come up with the call.
He, however, asked the banks to follow rules and regulations properly and facilitate industries to foster economic expansion and job creation.
"If due process is followed, there is nothing to be worried as any loans can become classified. So, you cannot stop issuing loans for this reason," he said.
Kabir suggested bankers should emphasize loan recovery through negotiation with defaulting borrowers, instead of filing cases hurriedly against them.
Besides, he also asked the bankers to issue credit to diversified sectors instead of focusing on any particular sector or on individual group of industries.
Mentioning that the 9.32% non-performing loans in the banking sector usual in the regional perspective, he, however, said that the many research organizations along with the International Monetary Fund had been exaggerating the NPL by adding the rescheduling loans and write-off loans which was not accurate.
Calling for expediting financial inclusion, Finance Minister AHM Mustafa Kamal called on the bankers to extend their supports for the wellbeing of the people who are lagging behind.
Sonali Bank Managing Director and Chief Executive Officer Md Ataur Rahman Prodhan expressed hope about bringing down Sonali’s NPL to single digit in the coming year.
Financial Institutions Division Senior Secretary Md Ashadul Islam, and Sonali Bank Chairman Ziaul Hasan Siddiqui, among others, were present at the event.
