Bangladesh Bank has asked 30 scheduled banks to take initiative to reduce their defaulted loans by December 31 as their non-performing loans increased significantly in the third quarter (July-September) compared with that of the previous quarter.
The BB has asked eight banks of the 30 banks to take measure to keep required provision within this year as they faced provision shortfall at the end of third quarter.
The central bank issued a letter to managing directors and chief executive officers of the 30 banks on December 6 asking them to inform the central bank by December 31 about their measures on how to decrease their classified loans and meet up the provision shortfall.
According to the latest BB data, the eight banks, which failed to keep the provision shortfall as of September 30 are: BASIC Bank, Rupali Bank, Sonali Bank, Bangladesh Commerce Bank, National Bank, Premier Bank, Standard Bank and Bangladesh Krishi Bank.
Defaulted loans rose by Tk 14,359.89 crore in the first nine months of the current calendar year as the banks disbursed huge amount of money on political considerations, breaching banking rules, a BB official told New Age on Monday.
The BB data showed that the overall default on debts stood at Tk 65,731.11 crore as of September 2016 from Tk 51,371.22 crore as of December 31, 2015.
Defaulted loans at Agrani Bank increased to Tk 5,711.25 crore as of September 30 from Tk 4,992.13 crore as of June 30 of this year, that of Bangladesh Development Bank to Tk 874.72 crore from Tk 757.14 crore, that of BASIC Bank to Tk 6,794.14 crore from Tk 6,307.31 crore, that of Rupali Bank to Tk 3,029.31 crore from Tk 2,360.99 crore, that of The Farmers Bank to Tk 277.02 crore from Tk 223.28 crore, that of Bangladesh Commerce Bank to Tk 533.23 crore from Tk 511.62 crore, that of Bank Asia to Tk 1,087.33 crore from Tk 900.70 crore, that of EXIM Bank to Tk 1,167.41 crore from Tk 1,086.45 crore and that of National Bank to Tk 2,421.53 crore from Tk 1,579.91 crore.
Besides, defaulted loans at another 21 banks also increased significantly in third quarter of this year, the BB data showed.
The overall defaulted loans constituted 10.34 per cent of the total outstanding credit amounting to Tk 6,35,986.89 crore in the banking sector as of September 30 this year.
The BB official said that the central bank had repeatedly asked the banks to take initiative to decrease the defaulted loans but they did not do so.
The banks frequently violate the central bank rules and regulations to disburse and sanction loans which fuelled up the non-performing loans, he said.
‘The finance ministry has also been appointing corrupt managing directors and chairmen to the state-run banks, which pushed the irregularities and defaulted loans’, the official alleged.
Political interference has also forced the banks to disburse loans to corrupt people, which adversely affect the entire defaulted loans, he said.
Want stories like this in your inbox?
Sign up to exclusive daily email
More Stories from Banking