The foreign lender had applied to the central bank last year to shutter its Sylhet branch
The National Bank of Pakistan (NBP) has decided to shut down its Sylhet branch after bad loans at the branch became insurmountable.
Md Quamruzzaman, the country head and chief executive of the Pakistani bank’s Bangladesh operations, confirmed the matter to the Dhaka Tribune.
“The Sylhet branch has been incurring losses for several years,” he said.
The NBP had applied to the central bank last year to shutter its Sylhet branch, said a senior official of the Bangladesh Bank seeking anonymity.
However, the central bank is yet to approve the application.
“The central bank has some queries -- we asked why they [NBP] want to close the Sylhet branch,” said Md Serajul Islam, spokesperson of the BB.
The foreign bank, which started its journey in Bangladesh in 1994, now has an astronomical proportion of default loans and its banking activities have come to a standstill.
At the end of last year, the NBP’s default loans stood at Tk 1,374.8 crore, which was at 97.7 per cent of its total loans, according to data from the BB.
NBP has four branches in the country -- located in Chittagong, Sylhet, Gulshan and Motijheel -- with 76 employees.
But its loan disbursement exercise has been stagnant for several years owing to its liquidity shortage.
The Pakistani bank fell into major trouble by giving loans to some fraudulent clients in 2013-14. The lender has yet to recover the sum, according to a senior official of the foreign bank.
“It is very difficult for us to recover the bad loans as most of the clients do not want to return the money because it is a Pakistani bank,” he added.
Loan disbursement has been suspended from last year, Quamruzzaman told Dhaka Tribune.
The bank has filed a total of 143 cases against 104 defaulters to recover the money, he added.
Since 2015, the NBP has recovered a total of Tk 193.99 crore from defaulters, further said.
Established in 1949, the NBP is a subsidiary of the State Bank of Pakistan.
As of September last year, the bank had 1,511 branches across Pakistan with assets of approximately $20.2 billion. Besides, the bank has branches in 21 countries.