State-owned BASIC Bank, which succumbed to reckless lending during the tenure of its controversial chairman Sheikh Abdul Hye Bacchu between 2009 and 2013, is now trying to get back on its feet by rescheduling the loans lent then.

After restructuring the board and management last year, it moved to reschedule Tk 2,100 crore out of Tk 4,500 crore in bad loans.

As part of the rescheduling plan, all necessary processes have been completed and down-payment made for Tk 1,500 crore, according to Alauddin A Majid, chairman of the bank.

The move is helping the bank in many ways. For instance, its bad loans and provisioning requirements have declined.

But most importantly, it is now able to make proper documentations against those loans and reduce the risks as well.

One of the best-run financial institutions until 2009, BASIC's downfall started when Bacchu took over as chairman in September that year.

The bank lent around Tk 5,500 crore during his tenure, most of which were approved and disbursed on inadequate documents and inflated mortgages.

Of the amount, Tk 4,500 crore turned bad, throwing the once best state-owned bank into severe trouble.

Its dire state compelled the government to dissolve the Bacchu-led board last year and appoint a new set, headed by Majid. The central bank also fired the then managing director of BASIC, Kazi Faqurul Islam, for presiding over the irregularities.

“We have identified almost all the borrowers of the bank, and are now sitting with them individually to motivate them to pay back the bank's money,” said a senior BASIC official.

The other measures that the bank has taken include bringing back its good customers and reducing the operating expenses.

“We were able to bring back seven good clients who left the bank during Bacchu's reign. We have taken over their loans at other banks.”

BASIC's operating expenses stood at just Tk 77 crore in 2010 and in four years' time, it ballooned to Tk 277 crore, as the Bacchu-led board doubled the branches to 68.

Now, the bank has washed its hands off high-cost deposits and stopped unnecessary spending, the official said. Given the measures, Majid is now hopeful that the bank will get back on track in a few years' time.

Capital shortage too has become a big challenge for the bank. “If we have adequate capital we can make good business,” Majid said.

Subsequently, BASIC has sought Tk 2,000 crore from the government to make up for its capital deficiency.