Four state-owned banks have failed to comply with most of the conditions imposed under the Memorandum of Understanding (MoU) they signed with Bangladesh Bank (BB) as part of an effort to help recover the banks from their ailing conditions.
This was disclosed as the central bank unveiled an assessment report at a meeting with the managing directors of the banks held yesterday at the central bank headquarters in the city.
Bangladesh Bank had, earlier, prepared a report to assess the targets and achievements in line with the conditions asked to be implemented in the year 2013.
Expressing its satisfaction over the recovery rates from the top 20 defaulters, the central bank, however, asked the managing directors to be more efficient in meeting other conditions set in MoU, Bangladesh Bank senior executives said.
According to the report, Sonali and Agrani Bank has failed to achieve the target in cash recovery from top 20 defaulters while Janata and Agrani Bank, however, achieved the target to some extent satisfactory level.
Sonali Bank achieved about 37% or Tk1,109 crore of cash recovery target against classified loans of top 20 defaulters for the year 2013, followed by Janata Bank 117% or Tk1,125 crore, Agrani Bank 42% or Tk488 crore and Rupali Bank 217% or Tk1,041 crore against the target of Tk3,010 crore, Tk960 crore, Tk1,170 crore and Tk480 crore respectively.
Sonali Bank achieved 50% or Tk13,535 crore against the target of Tk27,120 crore, followed by Janata Bank 69% or Tk5,934 crore against Tk8,630 crore, Agrani Bank 40% or Tk4,224 crore against Tk10,480 crore, Rupali Bank 46% or Tk887 crore against the target of Tk1,940 crore.
The four banks also failed to maintain the maximum limit of operating expense that was set in the MoU for the year 2013, excepting Sonali Bank.
The operating expense of Janata Bank stood at Tk8,712 crore against the limit of Tk8,229 crore, followed by Agrani Bank Tk7,823 crore against Tk7,725 crore, Rupali Bank Tk3,367 crore against Tk3,360 crore.
The operating expense of Sonali Bank stood at Tk11,780 crore, which is lower from the limit of Tk12,309 crore.
The banks provided more than 15% of their total capital to a single client or group, which is a gross violation of the MoU condition.
Sonali Bank provided loan to one company exceeding its single borrower exposure limit during the year 2013 while Janata Bank provided loan to the two groups and Rupali Bank to four companies, exceeding their limits, according to the assessment report.
Earlier in March 2014, International Monetary Fund (IMF) had expressed dissatisfaction over the performance of the four state-owned banks and their huge rescheduling through relaxed rules allowed by the central bank.
According to the assessment report, Sonali Bank rescheduled loans worth Tk1,746 crore in the year 2013 compared to Tk452.95 crore in 2012 followed by Janata Bank rescheduled Tk1,108 crore compared to Tk105.89 crore, Argani Bank Tk854.80 crore compared to Tk166.47 crore and Rupali Bank rescheduled Tk2059 crore compared to Tk600.57 crore.
