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Bangladesh Bank asks four SoBs to boost recovery from top defaulters

  • Published at 09:44 pm May 12th, 2019
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The Bangladesh Bank building at Motijheel Mehedi Hasan/ Dhaka Tribune

According to the meeting sources, recovery from top 20 defaulters of the four banks was not satisfactory

Bangladesh Bank has asked state-owned Sonali, Janata, Agrani and Rupali Banks to increase their loan recovery from top defaulters. 

This directive came at a review meeting held on Sunday between the central bank and the four states-owned banks on the banks' present financial situation. 

Bangladesh Bank governor Fazle Kabir chaired the meeting attended by managing directors of the four banks, Bangladesh Bank deputy governor SM Moniruzzaman and Executive Directors Mohammad Masum Kamal Bhuiyan, Kazi Saidur Rahman and SM Rabiul Hassan. 

According to the meeting sources, recovery from top 20 defaulters of the four banks was not satisfactory. 

In the year of 2018, the four banks' indicators of business operations were mixed. Although the number of loss making branches was reducing, their defaulted loans remained always high, with some having both provision and capital shortfall.

Bangladesh Bank has a memorandum of understanding with the banks since 2007 to improve the financial condition of Sonali, Janata, Agrani and Rupali Bank. 

In the MoU, the central bank has set targets on various issues including recovery from defaulters, maintenance of credit growth, reduction of losses and management expenses, and risk management. 

Every three months, these goals were evaluated at regular meetings with the banks.

At the end of December 2018, the total amount of defaulted loans in the banking sector stood at Tk93,911.40 crore or 10.30% of the total outstanding loans. 

Janata Bank is having the highest amount of default loans worth Tk17,224.9 crore (35.72% of total outstanding loans), followed by Sonali Bank at Tk12,061.03 crore (30.06% of its total outstanding loans). 

Agrani Bank’s default loans stood at Tk5,750.54 crore (16.65% of its total outstanding loans) and Rupali Bank’s at Tk4,140.89 crore (17.95% of total outstanding loans).