Janata bank incurred a net loss of Tk5,054 crore in 2020
The capital shortfall of Janata Bank stood at Tk5,475 crore at the end of December last year — the largest for a state-owned bank.
The accumulated capital deficit in Sonali, Janata, Agrani, and Rupali banks stood at Tk12,195 crore at the end of December 2020.
Janata bank incurred a net loss of Tk5,054 crore in 2020, mainly as the bank fell prey to loan irregularities and money laundering years ago by apparel manufacturers Crescent and AnonTex Group.
This has gotten the Bangladesh Bank concerned, prompting it to form a committee in March this year to find ways to meet the capital shortfall for state-owned banks.
Speaking to the Dhaka Tribune, Md Serajul Islam, central bank spokesperson and executive director, said: “State-owned banks are a crucial part of the financial ecosystem. They also provide many free services to the government.
“Some have been able to cover the capital deficit while some lag behind. A committee has been formed to find ways of improving the capital base of those state-owned banks that are lagging,” he added.
The banks and the committee have been asked to provide sustainable action plans on improving their financial health other than just being recapitalized by the government, he further said.
From January 2017 to February 2018, Crescent Group scammed and defaulted loans in the amount of Tk3,443 crore of the bank, according to a case filed by the Anti-Corruption Commission (ACC) in 2019.
A big portion of the embezzled money was siphoned off abroad according to case papers. Crescent Group Chairman MA Kader, his brother Abdul Aziz, who is the head of Jaaz Multimedia, and 13 others were accused in the cases.
On the other hand, 22 companies of AnonTex Group were given about Tk3,527.9 crore in loans by Janata Bank between 2010 and 2015, which is more than 25% of the lender’s capital base and in violation of the single borrower exposure limit set in the Bank Company Act 1991.
Of the sum, Tk2,800 crore were default loans that were rescheduled in 2019.
Although Janata Bank showed a profit of Tk24.64 crore in the final balance sheet by taking a provision deferral of Tk10,963 crore from the central bank in 2019, it had incurred a loss of Tk12,000 crore.