Two specialised banks grapple with Tk 6,814cr in classified loans.

Bangladesh Bank on Sunday asked Bangladesh Krishi Bank and Rajshahi Krishi Unnayan Bank to bring down their defaulted loans below 20 per cent of their total disbursed loans within June 30 this year. The direction came from a meeting between the BB and the two state-owned specialised banks at the central bank headquarters in the capital with BB deputy governor SK Sur Chowdhury in the chair. The managing directors and chief executive officers of the two banks were present at the meeting. The meeting was held in line with the memorandums of understanding signed by the BB and the two banks. The BB usually reviews the financial performances of the banks on quarterly basis in line with the MoU. According to the BB data, the defaulted loans at BKB stood at Tk 5,372.76 crore or 32.59 per cent of its total disbursed loans of Tk 16,308.28 crore as of December 31, 2014. The defaulted loans at RAKUB stood at Tk 1,441.26 crore or 32.49 per cent of its total disbursed loans of Tk 4,449.71 crore as of December 31, 2014. A BB official told New Age on Sunday that the two banks at the meeting had given a commitment to the central bank that they would take drives to recover the defaulted loans in the quickest possible time to bring down such loans below 20 per cent by June this year. The BB asked the banks to meet their capital shortfalls by taking necessary funds from the government for recapitalisation, he said. The capital shortfall of BKB stood at Tk 6,643 crore and that of RAKUB Tk 884 crore as of December 31, 2014. The top officials of the two banks informed the central bank that they had already requested the government to provide necessary funds to meet their capital shortfalls. The BB official said that the two banks faced large volume of the capital shortfalls due to an increasing trend in the defaulted loans in the recent years. The banks would have avoided the capital shortfalls if they were able to curb their defaulted loans, he said. The central bank asked the banks to speed up their automation programme as they are lagging behind other banks in this regard. The banks will be capable of tackling corruption if they implement the automation system in their branches and that will also play a role in reducing classified loans at the banks, the central banker said.

The government plans to strip state-owned banks of the power to recruit and hire new employees and instead return the authority to the central bank.

The government plans to strip state-owned banks of the power to recruit and hire new employees and instead return the authority to the central bank. The move to re-engage the BB after more than five years into abolishing the banker’s recruitment committee, headed by the BB governor, follows after the Bangladesh Bank found gross irregularities in recruitment of new bankers in the state-controlled banks in the last five years, a senior finance ministry official said. Through empowering the BB to oversee a proposed ‘recruitment authority’ to be headed by the central bank governor, the existing separate appointment committees and interview boards of the banks concerned will be abolished, he added. Sonali, Janata, Agrani and Rupali hired around 30,000 new officials – both first class and second class – and another about 15,000 were recruited in six other specialised banks since early 2010. ‘We will soon ask the banks to abolish all their appointment committees and interview boards,’ the senior finance official told New Age on Saturday. ‘Finance minister (AM A Muhith) will have intensive discussions soon with the chairmen and managing directors of the banks to bring about the changes in the appointment system’. BB in a recent position paper to the finance ministry recommended scrapping the existing hiring authorities of public sector banks as it found that undue pressures forced the banks’ authorities to compromise with the quality of fresh recruits. ‘The possibility of appointing qualified and fit candidates in public sector banks are getting slimmer day by day amid undesirable pressures piled on the banks’ authorities,’ reads the paper, signed by BB governor Atiur Rahman. ‘As comprises take place, lack of meritocracy keeps on hampering financial management and overall governance in the public sector banks,’ the governor added. He suggested formation of a ‘recruitment authority’ to be overseen by the BB to recruit new entrants in the banks. Since 2010, the banks’ management bodies have been recruiting employees at all levels according to recruitment rules laid down by their own boards. Former BB governor Salehuddin Ahmed said the realisation by the BB and the finance ministry on scrapping the current recruitment system in the public sector banks is praiseworthy. He said revival of bankers’ recruitment committee, headed by BB Governor, would be a burden for the BB. ‘If BB oversees the entire recruitment policy and system and engages institutions like Bangladesh institute of bank management to do the recruitment, it will make a huge difference, as the current recruitment system is plagued by corruption, nepotism and political bias,’ Salehuddin said. He, however, expressed doubt over the capacity of the finance ministry to bring real changes in the recruitment system, saying, ‘the finance ministry might not be able overcome political pressure.’ Officials concerned in the finance ministry said the new directives to scrap the existing recruitment system and introduce a BB-led recruitment committee are expected to come into affect at the soonest possible time. 

Ahmed Kamal Khan Chowdhury, Managing Director and CEO of Prime Bank Ltd, Dr Khater Massaad, Chairman of Star Industrial Holding of Lebanon, and other high officials pose for photograph after holding a meeting at a city hotel recently .

A business meeting between Ahmed Kamal Khan Chowdhury, Managing Director and CEO of Prime Bank, and Dr Khater Massaad, Chairman of Star Industrial Holding Ltd, Lebanon, was held at a city hotel recently. Md Touhidul Alam Khan, Deputy Managing Director and Chief Business Officer of Prime Bank, Md Moalllimul Islam, CEO, and Ajay Kumar, Finance Controller of Star Ceramics Limited, Bangladesh, were also present in the meeting.

Dr. Mohammed Haider Ali Miah, Managing Director of Export Import Bank of Bangladesh Limited, inaugurates the shifted Imamgonj branch of the bank, at Nurani Centerat Imamgonj, Chawakbazar in Dhaka on Saturday.

Export Import Bank of Bangladesh Limited has shifted its Imamgonj branch to a new location at Nurani Center at Imamgonj in Dhaka with a view to provide better services to the customers. Managing Director of the Bank Dr. Mohammed Haider Ali Miah inaugurated the shifted Imamgonj branch on Saturday, said a press release. Deputy Managing Director of the bank M Sirajul Islam presided over the programme. 

Bangladesh Bank Governor Dr. Atiur Rahman speaks at a discussion, jointly organised by Swiss Federal Office for the Environment, UNEP and Swiss Sustainable Finance, in Bern on Wednesday. 

Bangladesh Bank Governor Dr. Atiur Rahman said that the central bank has taken many innovative initiatives for addressing the longer term needs of inclusiveness and environmental sustainability towards stable economic growth and development pursuits of the country. The BB has been providing regulatory and policy support to align the entire financial sector towards supporting inclusive and environmentally sustainable growth; and that this approach has served the economy well in upholding domestic demand-led growth momentum amid post global financial crisis that slowed down export growth, he said. Dr. Atiur was addressing two sessions in Bern, jointly organised by Swiss Federal Office for the Environment, UNEP and Swiss Sustainable Finance on Wednesday. He said that the inclusion banking by channeling fund for under-served and excluded micro and small scale productive initiatives and green projects by adopting energy efficient and environmentally suitable output processes are adding incremental output in the real economy in Bangladesh. Mandated by its charter to support output and employment growth besides maintaining monetary and financial stability, BB stepped into imparting a deliberate directional bias in financing flows away from speculative and sustainability, BB chief informed. BB as a result is pursuing a host of concerted initiatives drawn up consultatively with financial intermediaries and targeted client bases, Dr. Rahman further added. The BB-guided partnership between banks and micro-finance institutions has been providing necessary input in strengthening inclusive and green financing flows to the underserved segments of the society in addition to bolstering financial stability agenda, he said.