State-owned BASIC Bank has been asked to intensify their effort on loan recovery to reduce default loan rate growing abnormally.
The instruction came at a meeting Bangladesh Bank held with the BASIC Bank management on Monday over the financial situation of the scam-hit bank.
The default loans were growing abnormally as large borrowers of the bank have been turning defaulters, said a senior executive of Bangladesh Bank.
The rate of loan recovery from the top defaulters is very poor, prompting the central bank to ask focusing on the loan recovery drive, he said.
BASIC Managing Director Khondoker Md Iqbal expressed his hope that the financial picture of the bank will change by June this year as they got the capital support of Tk790 crore from the government on 29 December last year.
He said they expect to get more fund from the government soon as part of recapitalisation and the positive effect of funding will be reflected at the year-end financial statement of 2014, which is yet to be published.
BASIC management also demanded that the bank be allowed to purchase loans of the clients who terminated their relations with the bank but the central bank did not allow such practice.
Currently, the bank faces a capital shortfall of Tk2,257 crore, according to the Bangladesh Bank data.
The default loans against top 20 defaulters rose by 103% to Tk1,793 crore on November last year compared to Tk879 crore in December 2013.
The default loan against top borrowers also rose aggressively, but the recovery was very poor last year.
The loan recovery was only Tk2 lakh in November last year which was Tk2.20 crore in December 2013.
The total loan recovery against top defaulters was only Tk2.19 crore last year, even in some months, the recovery was zero.
The total outstanding of large loan stood at Tk8534 crore in November last year.
The total default loans of the bank stood at Tk6,473 crore or 56% in the same month, according to the central bank latest data.
On the other hand, the bank already submitted many proposals of loan rescheduling to the Bangladesh Bank.
The bank rescheduled total of Tk154 crore during last year.
