The central bank has cautioned 20 banks over their poor performance in recovering non-performing loans (NPL)s.
Among the banks, eight were state-owned commercial and specialized banks and 12 were private commercial banks, who were also asked to submit a three-month work plan to the Bangladesh Bank regarding how they would expedite the bad loan recovery process.
The central bank came up with the warning during a meeting with the managing directors (MD) and chief executive officers (CEO) of the banks, presided by Bangladesh Bank Deputy Governor SK Sur Chowdhury.
“We have summoned chief executives of 20 banks and they have been asked to reduce their NPL,” said SK Sur Chowdhury.
“Moreover, we have asked these banks to strictly follow the risk management guidelines during new credit disbursement. Otherwise we will not hesitate in taking steps under the Bank Company Act.”
According to sources present at the meeting, a diagnostic on the bad loans of the summoned banks was presented there, where it was found the banks' NPL recovery in the last three months was less than 1%.
The Bangladesh Bank also asked the 20 banks to give more attention on quick disposal of cases on NPL, added the sources.