• Thursday, Oct 17, 2019
  • Last Update : 06:57 pm

BB warns 7 banks to reduce defaulted loans

  • Published at 10:08 pm June 11th, 2019
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The Bangladesh Bank building at Motijheel Mehedi Hasan/ Dhaka Tribune

Non-performing loans hit above Tk1.10 lakh crore

Bangladesh Bank (BB) yesterday warned seven banks to bring down their soaring defaulted loans. 

The seven banks are Sonali, Janata, Agrani, Rupali, National Bank, Islami Bank Bangladesh, and Al Arafah.

This directive came at an urgent meeting held at the BB headquarters on Tuesday.

Bangladesh Bank governor Fazle Kabir chaired the meeting attended by managing directors of seven banks. 

Md Ashadul Islam, secretary of the bank and financial institutions division (BFID) of the ministry of finance , Bangladesh Bank deputy governors SM Moniruzzaman, Ahmed Jamal and  Executive Directors SM Rabiul Hassan and Md. Serajul Islam  were present at the meeting.

Talking to the Dhaka Tribune, Bangladesh Bank Executive Director and spokesman Md. Serajul Islam said that, “Bangladesh Bank governor inquired  about the reasons why the defaulted loans had shot abnormally as of March this year. He asked them to bring down their defaulted loans without any delay. ”

On the other hand, banks’ MD assured that they would undertake attempts to reduce the amount of defaulted loans in the June quarter, he added. 

A managing director of a state-owned bank said that, "the non-performing loans (NPLs) in our banking sector typically increases in the first quarter of every year. These NPLs will reduce in the June quarter,” he hoped. 

As of March this year, the non-performing loans (NPLs) of the country’s banking sector stood at Tk1,10,873.54crore, the highest ever in the country. 

Former Bangladesh Bank Governor Salehuddin Ahmed said: “The policies adopted recently by the government and the central bank for banking sector went in the wrong direction. The defaulters were given leverage by these policies. Good borrowers are now feeling discouraged to pay debts.”

The central bank must be rigorous to reduce the default loans and all the facilities extended to the defaulters should be scrapped, he suggested.