BB freezes Janata Bank’s Tk 418cr over MoU condition violation

Staff Correspondent | Published: 22:40, Apr 19,2017

 
 

Bangladesh Bank has taken a decision to freeze Tk 418 crore of state-owned Janata Bank kept in its account with the central bank for disbursement of loans beyond limit during the year 2016.
BB in each year signs MoUs with four state-owned commercial banks setting targets for them to improve different indicators.
Under the agreement, Janata Bank was bound to make improvements in 13 indicators, including loan disbursement, defaulted loan recovery, capital recovery and improvement of the loss incurring branches.
As per a condition of the MoU, Janata Bank was allowed to disburse 12 per cent more loans in 2016 than that in the previous year.
Janata Bank’s loan disbursement, however, grew by 15.19 per cent in 2016 in violation of the MoU condition.
In 2015, Janata disbursed Tk 34,986 crore in loans, which increased to Tk 40,303 crore in 2016.
On the other hand, the bank failed to bring down defaulted loans to 9.74 per cent of total loans; instead its defaulted loan stood at 10.40 per cent in 2016.
The bank also failed to meet up defaulted loan recovery target as it only managed to recover Tk 640 crore out of its target of recovering Tk 1,200 crore during the year.
A high official of Janata Bank, however, expected that the central bank may reverse its decision to block the fund considering the bank’s loan disbursement in SME sector which is a positive thing.

More about:

Want stories like this in your inbox?

Sign up to exclusive daily email

Advertisement

images

 

Advertisement

images