Banking sector experts advised that the state-owned Rupali Bank Limited should disburse more credit and advances to prospective borrowers in a bid to avert any long-term crisis.

They also advised the bank authority for attracting prospective entrepreneurs for taking loans from the bank.

They feared that the bank will face long-term crisis if its rate of loan disbursement slows down.

To make-up the banks’ growing costs for paying interests against higher deposits as well as increased salaries for new recruitment and also for expanding network by opening new branches, there is no alternative but to sanction new loans among potential borrowers, experts opined.

The credit growth of Rupali Bnak was 14.90 percent in December 2012 while in 2010 and 2011, the rate were 15.71 percent and 16.01 percent respectively.

In an official order in May 2013, the Bangladesh Bank limited the bank’s credit growth to 10 percent from previous rate of 15 percent. Later on September last year, the central bank, in a letter, advised the bank to reduce credit growth to 2.50 percent (on quarterly basis).

Senior banking sector experts recommend that the government should allocate the budget for credit disbursement by any bank ahead of the beginning of the year because the bank’s loan distribution activities are operated on the basis of field level target.

Besides missing the yearly credit disbursement target, then banks fail to fulfill the quarterly disbursement targets, they said adding, the similar problem arouse in case of Rupali Bank.

As a result, the banks’ credit marked a 13 percent growth, though it was set 10 percent by Bangladesh Bank.

The bank failed to maintain the central bank’s ceiling as the Bangladesh bank order was issued lately, they said.

M. Farid Uddin, Managing Director of Rupali Bank Limited said the total deposit of Rupali Bank stands at Tk 17,795 crore till December 2013 while its loans and advances amounts Tk 10,742 crore.

He said credit deposit ratio (CDR) is 60.37 percent but it needs 81 percent CDR for operating day-to-day banking activities. To maintain the level of CDR, the bank should raise its credit growth.

He also said, the bank paid Tk 13.50 crore interests on deposits, while its operating expenditure was Tk 473.55 crore, cash adjustment of goodwill value was Tk 241.73 crore. With these, the bank’s total expenditure totaled Tk 2,065.28 crore in the year.

There is no alternative to disburse more credits for making profits in order to meet the budget requirement, deducting Tk 660.79 corer incomes from total expenditure.

The credit of Rupali Bank grew in 2012 as non-funded liabilities of some reputed customers against letter of credit (L/C) turned into funded liabilities for non-compliance.

As a result, a forced loan amounting to Tk 708 crore was created. For the forced loan amount and also for increased interest payments against credit accounts resulted in huge credit balance, enhancing credit growth as well.

Sources also said that entire credit balance is not newly-sanctioned advances.

News:Daily Sun/28-Mar-2014

Bangladesh Bank (BB) has given banks some directives for operating agent banking in a safe and secure manner, reports In a circular today, the Banking Regulation and Policy Department of the central bank said every agent have a current account with the bank concerned where maximum available deposit will be Taka 1.0 million.

A customer can deposit or withdraw maximum Taka 25,000 in cash each time and such withdrawal and can be made maximum twice in a single day. This ceiling will not be applicable in case of withdrawal of inward remittance.

No “bank related people” will be appointed as agent and agent banking will have to be conducted in area (out of the preview of metropolitan city corporation and pourashava). Shariah- based banks can only conduct Islami banking at agent Money to be transacted up to customer level will have to be brought under insurance coverage, it Banks must submit some documents: a) sample copy of agreement to be signed with agents, b) plan about agent banking (including business continuity plan) and c) guidelines approved by the board of

directors about agent BB’s respective departments will give banks approval letters under which banks will be able to appoint as per its policy. For supervising the agent banking operation, the list of agents and copies of agreement other relevant papers must be sent to Green Banking and CSR Department of the central bank.

State banks last year fell way short of achieving their loan recovery targets despite the central bank's constant In 2013, the four banks aimed for cash recovery of Tk 5,379 crore from loan defaulters,

but managed only Tk 2,834 crore, which is 52.7 percent of the target, according to data from the central The recovery from top 20 loan defaulters, however, was better than in previous years: Sonali, Agrani, Janata and Rupali achieved 66 percent of their targets for 2013, whereas in previous years it was less than 12 Janata and Rupali were the high-achievers, hitting 117 percent and 217 percent of their targets respectively for retrieving bad loans from the top 20 defaulters. In comparison, Sonali and Agrani fared poorly, managing 37 percent and percent of their targets respectively.

As for their recovery target from the other defaulters, the banks managed only 51 percent. Sonali achieved 50 percent of the target, Janata 69 percent, Agrani 40 percent and Rupali 46 A Janata Bank high official said the recovery of loans would have been higher were it not for the slow and lengthy legal As of December 2013,

the number of pending cases was 15,395, involving Tk 17,210 crore, according to the central bank The four banks last year signed performance agreements with the central bank, and the loan recovery targets were made Early this month, Bangladesh Bank evaluated the performance of the four banks in line with the performance agreements and found most of the conditions were not The state banks are not allowed to provide more than 15 percent of capital as credit to a single client borrower, as per the agreements. But, Sonali exceeded the upper limit for one client, Rupali for four and Janata two.

Janata also provided around Tk 50 crore to a government entity, exceeding Another condition was that the operating expenses would not be more than 10 percent of previous year's actual spending, but Janata, Agrani and Rupali went slightly over the The state banks were also supposed to make their loss-making branches profitable, but as of December 2013 some 129 of the branches continue to lose However,

,the four banks improved their position significantly regarding capital, loan growth and classified loan Loan rescheduling and write-offs under BB's relaxed classification rules owing to political turmoil helped the state banks improve their situation in these cases. In 2013, the nationalised banks wrote-off around Tk 4,000 crore in contrast to Tk 1,000 crore a year ago.

Former chairman of the bank Quazi Sirazul Islam inaugurated the branch as the chief guest, said a press release.

Hafiz Ahmed, Habibur Rahman, Fahim Ahmed

Pubali Bank Limited declared 5 percent stock dividend and 5 percent cash dividend for its shareholders for the

year ended 31st December 2013.

The announcement came at the 31st Annual General Meeting (AGM) of Pubali Bank Limited held at Basundhara Convention Centre in Dhaka on Tuesday.

Chairman and two vice-chairmen of the Board of Directors of Pubali Bank Limited were elected unanimously in its 971st Board Meeting after the AGM.

Eminent industrialist and social worker Hafiz Ahmed Mazumder has been elected Chairman of the Board of

the bank while Habibur Rahman and Fahim Ahmed Faruk Chowdhury, eminent industrialists and social workers have been elected vice-chairman of the bank.

Hafiz Ahmed Mazumder, a tea plant owner is associated with many social welfare activities. He contributed to

the country’s education sector by establishing “Hafiz Majumder Education Trust”.

Habibur Rahman is a renowned businessman and is engaged with various social activities. He is the Sponsor

Director of Green Delta Insurance, Delta Hospital and Delta Medical Center.

Fahim Ahmed Faruk Chowdhury is a renowned businessman and is engaged with various social activities. He

is Managing Director of Chittagong Electric Manufacturing Company Ltd and Ranks FC Properties.