4 state-run banks instructed to increase loan recovery from defaulters
The Bangladesh Bank yesterday instructed four state-run banks to undertake quick loan disbursement from the stimulus funds announced by the government, especially from the Tk20,000 crore stimulus package for the pandemic-affected cottage, micro, small and medium enterprise (CMSME) sector.
The central bank of the country also instructed these banks to reduce the number of their loss-making branches and increase loan recovery from defaulters.
The instructions were given at a meeting with state-run banks Sonali, Janata, Rupali and Agrani held at the head office of the Bangladesh Bank yesterday. Bangladesh Bank Governor Fazle Kabir presided over the meeting.
The Bangladesh Bank meets with the four state-run banks every six months as it [BB] has signed a memorandum of understanding (MoU) with the four banks on improving their financial state.
The managing directors and chief executive officers of the four banks were present at the meeting. From the Bangladesh Bank, deputy governors SM Moniruzzaman and Ahmed Jamal and executive directors Masud Biswas, Abu Farah Md Naser, Md Humayun Kabir and Lila Rashid were present.
The loan disbursement for the CMSME sector has been proceeding at a slow pace since the beginning.
In the five months till September 15, the banks disbursed only Tk3,330 crore from the Tk20,000 crore stimulus fund, which is 16.65% of the total fund, according to the latest data from the Bangladesh Bank.
Taking to Dhaka Tribune, Agrani Bank Managing Director Mohammad Shams-Ul Islam said: “The Bangladesh Bank has instructed us to quickly disburse loans from the Tk20,000 crore stimulus fund to the CMSME sector as our disbursement to the sector is still very low.”
The banks were also instructed to boost loan recovery from defaulters, he added.
The high amount of non-performing loans, provision shortfall and capital shortfall of the four banks were also discussed during the meeting, said a top Bangladesh Bank official requesting anonymity.
The governor of the Bangladesh Bank had strictly instructed the banks to reduce the number of their loss-making branches, he further said.
Currently, the state-run Sonali Bank has 50 loss-making branches, Janata Bank has 79, Rupali Bank has 16 and Agrani Bank has 78, according to data from these banks.