10 banks asked to cut defaulted loan ratio below 10pc

September 29, 2014

Industrial Credit
10 banks asked to cut defaulted loan ratio below 10pc
Bangladesh Bank on Sunday asked 10 scheduled banks to decrease their industrial defaulted loan ratio below 10 per cent as their industrial classified loans are hovering over 15 per cent.
The 10 banks are: Sonali Bank, Agrani Bank, Bangladesh Krishi Bank, Rajshahi Krishi Unnayan Bank, BASIC Bank, Bangladesh Development Bank, Uttara Bank, State Bank of India, National Bank of Pakistan and ICB Islamic Bank.
The decision came from a quarterly review meeting between the BB and the scheduled banks on the recent scenario of the SME and industrial loans held at the central bank headquarters in the capital.
BB executive director Nirmal Chandra Bhakta presided over the meeting while managing directors and deputy managing directors of the banks attended.
A BB official told New Age on Sunday that the central bank had asked the banks to increase their asset quality so that their disbursed loans would not become defaulted.
The central bank asked the banks to speed up their recovery programme of defaulted loans as such type of initiative would play a role in strengthening their financial health, he said.
The BB data showed that the industrial defaulted loans in Sonali Bank stood at 27.71 per cent of its total disbursed industrial loans as of June 30, 2014. The figure was 19.50 per cent for Agrani Bank, 17.38 per cent for BKB, 32.51 per cent for RAKUB, 26.78 per cent for BASIC Bank, 34.16 per cent for BDBL, 18.99 per cent for Uttara Bank, 22.13 per cent for SBI, 48.39 per cent for NBP and 58.67 per cent for ICB Islamic Bank.
The bank officials claimed at the meeting that they had been facing a dull business situation in the last one and half years due to political uncertainty resulting that their industrial defaulted loans soared in the period, the central bank official said.
He, however, said that the defaulted loans in the 10 banks had also increased due to the recent loan scams along with the dull business as the overall defaulted loans in the industrial sector declined in the last financial year.
The BB data showed that the industrial defaulted loans had declined to Tk 15,225.90 crore in financial year 2013-14 from Tk 15,553.05 crore in the FY13.
The central bank in the review meeting also asked the banks to increase their SME loan disbursement in the rural areas, the BB official said.
The BB data showed that the banks and the NBFIs disbursed Tk 11,252.46 crore in loans to the SMEs located in the rural areas from during January-June of 2014 under the BB’s small and medium enterprises credit programme. They distributed Tk 47,160.92 crore under the programme in the period.
The BB asked the banks to decline their interest rate on the SME loans as majority of them were now charging 18-per cent to 22-per cent rate of interest on the SME loan products.

-With New Age input

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