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Bangladesh Bank instructs 11 banks to provide info on top 20 defaulters

  • Published at 09:52 pm May 6th, 2019
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Bangladesh Bank logo Mehedi Hasan/ Dhaka Tribune

Recently the central bank sent separate letters to these banks, seeking information  about their top 20 loan defaulters

Bangladesh Bank has instructed 11 commercial banks to provide information about  its top 20 loan defaulters to know more about the real condition of the country’s banking sector.

The banks are: Janata Bank, AB Bank, Al-Arafah Islami Bank, One Bank, Eastern Bank, Mercantile Bank, NCC Bank, Shahjalal Islami Bank, Brac Bank, Southeast Bank and Mutual Trust Bank. 

Recently the central bank sent separate letters to these banks, seeking information  about their top 20 loan defaulters.

The information required from the Bangladesh Bank include total amount borrowed by the defaulters, loan recovery process undertaken so far, top loan rescheduling cases, top interest waiver cases and  case settlements against defaulters.

The central bank has also sought comments from the banks’ respective managing directors on the entire loan defaulting trends and causes. Opinions have also been sought from the banks’ respective loan management committee officials.

All applications of the top borrowers, branch evaluation reports, board/management approvals, project inspection reports, collateral security evaluation and other relevant documents have also been asked to hand over to the central bank.

Separate committees have been formed last month with officials of the central bank's Inspection Division to conduct special inspections at all eleven banks. The committees have been instructed to submit their reports by this month, said a senior Bangladesh Bank official

Furthermore, the committees will also recommend amending the Bank Companies Act, the Artha Rin Adalat (Money Loan Court), the Financial Institutions Act, and other bankruptcy-related legislation.

A policy for compulsory merger of weaker banks and financial institutions will also be drafted by a committee. 

Former governor of the central bank Salehuddin Ahmed said a strong commission was needed to resolve issues plaguing the banking sector.