BASIC Bank has failed to implement seven of the ten conditions imposed by the central bank for performance improvement.

But a high official of the state-run bank said it has improved significantly in areas in which it has control after the new management and board took over in July last year.

However, the targets of lowering default loans, meeting capital deficit and recovery cannot be achieved overnight, he added.

BASIC Bank's loan growth in 2014 stood at 9.39 percent as per Bangladesh Bank's instruction to bring it below 16 percent.

Another condition of the central bank was to ensure that the operating expenses do not increase more than 10 percent over previous year's expenses, which the bank succeeded in doing. At the end of December 2014, its operating expenses stood at Tk 275.52 crore, which was 90.73 percent of the target set by the BB.

The advance-deposit ratio would have to be maintained within 81 percent up to June 30, 2015. It stood at 82.28 percent in December 2014, which is close to the target.

The growth of non-funded loans stood at 2.15 percent last year against the target of not more than 10 percent.

However, BASIC Bank failed to stick to the single borrower exposure limit.

According to BB condition, the bank cannot grant more than 15 percent of its capital to a single borrower. But it crossed the limit in case of 83 clients.

It lent Tk 3,370 crore more than it was allowed to, according to the central bank review.

Asked, the BASIC Bank official said it was the previous management and the board that granted the loans, and their successors could not lower the limit in such a short time.

Earlier, a finance ministry report said BASIC Bank has progressively increased its single borrower exposure limit since 2009 in a gross violation of banking rules.

However, BASIC Bank is trying to cut it gradually, added the official.

In 2014, BASIC Bank made total cash recovery of Tk 286.39 crore, which is only 42.60 percent of its target. The central bank set a target of realising a minimum of Tk 630 crore by 2013.

It is also set to fail to bring down the non-performing loans. BASIC Bank is supposed to bring it to less than 20 percent by June 2015, but as of December 2014 its NPL ratio stood at 53.32 percent.

The official of the bank said many loans have been given using fake documents and in fraudulent ways.

“So, now our main target is to establish the real ownership of the loans and to complete proper documentation for those. Once this is done, we will be able to realise the loans by putting pressure on the borrowers.”

In line with the agreement signed with BB, the bank also failed to make up its capital shortfall. Rather, it widened to Tk 2,223 crore in December 2014. It has to fill the gap by June 2015.

The bank received around Tk 790 crore from the government for meeting the capital deficit, and has sought more funds, said the banker.

In July 2013, the government appointed a new board and a managing director to BASIC Bank, after a central bank investigation unearthed financial irregularities that cost the bank Tk 4,500 crore during the tenure of previous chairman and managing director.