Default loans rise in April-June
Scandal-hit BASIC Bank accounts for two-thirds of the increase
Banks' total default loans rose Tk 3,183 crore in the three months from March 31, with the scam-hit BASIC Bank accounting for almost 64 percent of the rise.
On June 30, the banking sector's total default loans stood at Tk 51,345 crore, up 6.59 percent from the first quarter, according to data from the central bank. The amount is 10.75 percent of the total outstanding loans.
The state-run BASIC Bank alone accounted for Tk 2,034 crore of the default loans, which is 40.77 percent of its total outstanding loans. Only ICB Islami Bank has a higher percentage of default loans.
Of the 47 scheduled banks (excluding the nine new banks), 23 banks saw their default loans ascend and 24 descend.
The four state-owned commercial banks' default loans soared Tk 1,030 crore between the months of April and June, with Agrani alone accounting for Tk 571 crore.
The default loans of private commercial banks rose Tk 632 crore, with just two banks responsible for 80 percent of the sum. Foreign banks' saw their default loans increase Tk 196 crore.
Meanwhile, the default loans of three specialised banks -- Krishi Bank, Rajshahi Krishi Unnayan Bank and Bangladesh Development Bank -- dropped.
Anis A Khan, managing director of Mutual Trust Bank, said the reason for the increase in default loans is that Bangladesh Bank allowed special rescheduling facility as a result of political instability last December, which many failed to repay later and have now become default loans.
From December last year to March this year, the banks regularised Tk 14,765 crore via the facility, according to BB.
Nurul Amin, managing director of Meghna Bank, echoed Khan, adding that many banks extended the facility to even their default borrowers to improve their balance sheets.
Many banks showed their bad loans as good ones so that their balance sheets look better and more profits can be given to the owners of banks.
Later, BB inspections detected these irregularities and the loans were classified again. Another reason behind the increase in default loans is that in 2012 and 2013 many loans were given through fraud, which are now gradually becoming defaults, Amin said.
Though the political situation is calm now, an uncertainty still looms large, due to which business has not yet picked up. As a result, many businessmen are unable to repay their loans on time, which also increases the amount of classified loans, the Meghna Bank MD added.
Zaid Bakht, a director of Sonali Bank, said the state-run commercial bank is being very meticulous before sanctioning loans. Subsequently, the loans given out in recent times are not defaulting; the loans which were disbursed before are to blame for the rise in default figures.
Another reason for the rise in default loans of state-owned banks is the jute sector, said Bakht, also the research director of Bangladesh Institute of Development Studies.
News:The Daily Star/12-Aug-2014
MTB Unit Fund declares 11pc cash dividend
The Trustee Committee of the MTB Unit Fund declared 11 percent cash dividend for the unit holders for the fiscal 2013-2014.
Alliance Capital Asset Management Ltd (ACAML) is the asset manager of the MTB Unit Fund and Bangladesh General Insurance Company is its Trustee, said a press release.
NRBC Bank opens branch in Rajshahi
Engr. Farasath Ali, Chairman, NRB Commercial Bank Limited, inaugurated the branch, said a press release.
The inaugural ceremony was attended among others by Alternate Director AM Saidur Rahman, Dr Rafiqul Islam Khan, Police Commissioner of Rajshahi Barrister Mahbubur Rahman, and renowned industrialist and businessman Lutfar Rahman.
Managing Director and CEO of the bank Dewan Mujibur Rahman, Senior Executive Vice President Arif Md. Shahedul Haque, EVP and Company Secretary Md Rafiquzzaman, VP and CFO Harunor Rashid, Vice President Md. Mostahaque and Head of Branch Asim Kumar Das also attended.
Pubali Bank workshop on banking risk held
A workshop titled “Core Risk in Banking” was held recently under the auspices of Pubali Bank Training Institute with participation of 29 officers and executives.
In the concluding ceremony, Managing Director and CEO of Pubali Bank Helal Ahmed Chowdhury graced the occasion as chief guest, said a press release.
Niranjan Chandra Gope, Head of Training of Pubali Bank Training Institute, presided over the function and Nitish Kumar Roy, DGM, ICC was present on the occasion.
BB signs deals to provide Tk 100cr for small entrepreneurs
Bangladesh Bank yesterday signed Tk 100 crore re-financing deals with 32 banks and financial institutions to provide soft interest loans to small entrepreneurs, reports UNB.
Under the deals, 23 banks and nine financial institutions will get funds from the central bank at five percent interest for disbursement among the categorised entrepreneurs at 10 per cent interest. Each entrepreneur can take a loan up to Tk 10 lakh without collateral and up to Tk 25 lakh with collateral as running capital and term loan.
Speaking at the signing ceremony Bangladesh Bank Governor Atiur Rahman said the deals aimed at job creation through new entrepreneurs who are entering the job market.
“Our main target is to create a new group of entrepreneurs with new dimension,” he said referring to Dhaka Chamber of Commerce and Industry’s initiative under which about 1000 new entrepreneurs were training to start businesses.
“I think the new entrepreneurs would run business mostly based on new technology,” said Rahman. He urged banks and financial institutions to provide soft term loans to them. He said Bangladesh is the third largest country in software export. He also urged the bankers to focus on agricultural sector’s entrepreneurs.
Atiur mentioned that Bangladesh Bank has launched a Tk 600-crore re-financing scheme for small entrepreneurs from which a women entrepreneur can take loan upto Tk 25 lakh on easy terms.