Defaulted loans in 9 new banks rise by 161pc in Jan-Jun

AKM Zamir Uddin | Published at 11:59pm on August 25, 2017

images

The amount of defaulted loans in nine new banks which are enjoying political backings increased by 161.03 per cent to Tk 713.25 crore in the first six months (January-June) of this year, Bangladesh Bank officials said.
In the nine banks, the amount of defaulted loans was Tk 273.24 crore as of December 31, 2016.
BB officials said the surge in the non-performing loans in the banks was the fallout of a number of loan-related scams and corruptions in some of the banks.
The nine new banks are: Meghna Bank, Midland Bank, Modhumoti Bank, NRB Bank, NRB Commercial Bank, NRB Global Bank, South Bangla Agriculture and Commerce Bank, The Farmers Bank and Union Bank.
The BB provided licences to the nine banks in 2012 considering the political background of the owners of the banks despite severe criticisms from different corners, an official of the central bank told New Age on Thursday.
Most of the directors and chairmen of the nine new banks are directly involved with either the politics of the ruling Awami League or those of its allies.
The BB inspection teams have already unearthed various types of corruptions in disbursing loans in some of the new banks.
The BB data showed as of June 30, 2017 the amount of classified loans in Meghna Bank increased to Tk 55.38 crore from Tk 20.77 crore as of December 31, 2016, that in Midland Bank to Tk 32.54 crore from Tk 14.35 crore and that in Modhumoti Bank to Tk 5.45 crore from Tk 4.51 crore.
The amount of non-performing loans in NRB Bank rose to Tk 31.06 crore as of June 30, 2017 from Tk 24.11 crore as of December 31, 2016, that in NRB Commercial Bank to Tk 191.69 crore from Tk 19.30 crore, that in NRB Global Bank to Tk 63.58 crore from Tk 14.63 crore and that in South Bangla Agriculture and Commerce Bank to Tk 10.94 crore from zero NPL, the data showed.
The data showed the amount of classified loans in The Farmers Bank increased to Tk 306.21 crore as of June 30, 2017 from Tk 171 crore as of December 31, 2016 and that in Union Bank to Tk 16.37 crore from Tk 4.77 crore.
The BB has recently detected huge anomalies in loan disbursement by The Farmers Bank and NRB Commercial Bank.
The central bank appointed observers to the banks to check any further corruption in the banks, the BB official said.
The BB official feared that the defaulted loans in the nine new banks might increase further in the coming days if the banks did not comply with the central bank’s rules while disbursing loans.
He said the central bank should give more attention to the new banks to compel them follow the rules and regulations.
According to the BB data, the amount of defaulted loans in the banking sector increased by Tk 11,976.22 crore to Tk 74,148.54 crore as of June 30, 2017 from Tk 62,172.32 crore as of December 31, 2016.