Bangladesh Bank Governor Atiur Rahman speaks at a programme to inaugurate the operations of 'large-loan monitoring software' of the central bank, at the regulator's headquarters in Dhaka yesterday

The central bank has introduced a system for direct and close monitoring of big loans in the backdrop of various cases of embezzlement including that of the Hall-Mark Group.

Bangladesh Bank Governor Atiur Rahman yesterday inaugurated the operations of 'large-loan monitoring software' at the Bank's headquarters in Dhaka.

“In the existing system, it is not possible to get an idea about the nature, evolution and future of loans taken by a borrower, but under the new system almost all large borrowers will be kept under strict monitoring,” Rahman said at the function.

Banks will have to maintain a database of the large borrowers and make the data available online for the central bank.

The data to be submitted include the borrowers' debt-equity ratio, profitability, loan concentration in a sector, and the amount of non-funded facility converted to funded facility.

About 25-30 percent of the banks' total loans are in the hands of large borrowers, according to BB statistics.

Sonali Bank's Ruposhi Bangle Hotel branch gave Hall-Mark and five other companies a total of Tk 3,547 crore in loans and a large part of the loans was non-funded through bill purchase.

These loans created a big liquidity crisis in the entire banking system.

The BB has so far taken various steps to prevent the recurrence of such scams, and monitoring large loans using the new software is one of the steps.

The governor said the BB has taken multipronged programmes to bring strategic changes in its monitoring. He said the central bank has been monitoring the overall situation in the banking sector through various measures.

Rahman said the new system will allow the BB to know how the non-funded loans turn into funded loans, their continuous evolution and the amount.

Due to non-funded loans, the loan portfolios of the banks become risky and it is a major cause of increase in default loans.

The software will enable BB to forecast on any liquidity crisis and advise the banks to take corrective measures, Rahman said.