Bangladesh Bank has found huge irregularities on loan disbursement, increase in classified loans, lack of provision, asset quality and good governance in Basic bank. In these circumstances BB asked the bank to improve their financial health and to start recovering their classified loans. Basic Bank however has failed to improve the situation according to sources.
This has prompted Bangladesh Bank to sign a Memorandum of Understanding with Basic Bank to closely monitor their activities. The decision came at a meeting held at the BB office chaired by Governor Dr. Atiur Rahman yesterday and a letter has sent regarding this.
A high official from the central bank said, the letter has been sent to Basic bank asking them to prepare for signing a MoU with BB.
A Bangladesh Bank official said, classified loans of the bank are increasing due to the tendency of disbursing loans without meeting requirements. Besides, the bank has disbursed huge loans to some people and industries even when repayment records are not good. BB warned the bank several times by issuing letters to improve their financial system. But they have not paid heed to Bangladesh Bank’s instructions.
The central bank earlier signed the MoU with several state owned banks to improve its financial performance by lending policy support after the recent hall mark scam.
