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.