BASIC Bank’s classified loans rose 163% to Tk1,863 crore in first nine months of last year when the country’s largest ever loan forgery by the bank was revealed.
The bank faced a huge outcry due to the credit scam involving Tk4,500 crore.
With the incident unearthed, Basic Bank was found teeming with non-performing loans in a shocking amount as most of the loans were disbursed without proper documents and scrutiny.
In December 2012, the bank’s classified loans amounted to Tk706.57 crore, according to Bangladesh Bank data.
The biggest loan scam later prompted the central bank to bring the bank under close monitoring through signing a memorandum of understanding to restore financial discipline.
Although the bank saw an increase in default loans, the growth of loans was not of that proportion.
Also, the finance ministry warned the bank management of the rise in default loans.
Of the total classified loans, an amount of Tk1,311 crore turned bad in September last year from Tk256.50 crore in December, 2012 with having very little chance to recover.
The bank has classified loans of Tk895 crore as Special Mention Account (SMA) which was Tk62 crore.
The total loans and advances of the bank stood at Tk10,112 crore in September last year against the deposit of Tk12,144 crore.
Net loan growth of the bank registered 19.03% while deposit growth stood at 57.13% during the 9 months.
Bangladesh Bank expressed concern about the poor financial health of the bank and deputed an observer on November 27 to ensure enforcement of regulations and help revive it from continuous deterioration.
The capital shortfall of the bank stood at Tk597 crore in September last year. It maintained a capital surplus of Tk71 crore in December, 2012.
BASIC Bank, however, sought capital assistance of Tk60 crore in the last year, but the government did not provide any fund.
The provision shortfall of the bank stood at Tk304 crore against the required provision of Tk739 crore.
BASIC Bank is a 100% government-owned specialised bank, which started operation in 1989 with a paid-up capital of Tk80m only with a special mandate to provide 50% of loanable fund to small and medium enterprises (SMEs).
The bank has a total of 72 branches across the country.