Four state-owned banks (SoBs)- Sonali, Agrani, Rupali and Krishi Bank- currently suffer 45 percent of total classified loans in industrial sector of the country, showed Bangladesh Bank data.

The total classified loan in the sector stood at Tk 71.54 billion early in the current fiscal, which is 5.26 percent of total outstanding loan.

Bangladesh Bank (BB) data also showed that the privately-owned banks have 30.80 percent of classified loan while the foreign banks 2.38 percent and private specialised banks 11.95 percent and other financial institutes have 9.29 percent.

Former Finance Adviser to a caretaker government Dr. AB Mirza Azizul Islam told daily sun that classified loan and its slow recovery is nothing new for the state-owned banks.

He said state-owned banks don’t conduct any adequate study and scrutiny before providing loans, at one hand, and distribute a significant amount of loans under political consideration, on the other hand, increasing the likeliness of the loans to be classified.

“The political influence also makes the loan recovery difficult for the state-owned banks,” said Dr Mirza Aziz.

He said: “Although Bangladesh Bank initiatives such as enacting laws helped to improve the situation slightly, the current statistics are bleak again.”

The liquidity crisis slowed down the credit flow in the commercial banks during the second half of the last year, said the senior officials of the commercial banks.

According to BB data a total of Tk. 541.62 billion was distributed as industrial credit during the last six months of 2011. Of the amount, the operating capital was Tk 368.57 billion while the term loan amounted to 173.05 billion.

The data said total industrial credit during the same period of 2010 stood at Tk 525.36 billion.

As the figures showed, the total recovery of industrial credit during the last six months of 2011 was Tk 470.28 billion. The running capital amounted to Tk 318.57 billion and the term loan reached Tk 151.71 billion during the period.

The BB figures also said the classified loan in industrial sector during the second half of 2010 stood at Tk.73.82 billion which is now Tk 71.54 billion, marking a decline of 3.9 percent.

According to the central bank’s officials, there were various steps taken to reduce the amount of classified loans and the commercial banks complied with the BB directives to implement the steps, thus being able to reduce the amount.

During the second half of 2011, the amount of expired loan stood at Tk 127.60 billion which is 9.39 percent of total credit in the industrial sector.

Of the amount, the running capital was Tk 62.78 billion and the term loan was Tk 64.82 billion.

The classified loan during the period also marked a rise by 13.43 per cent from the amount of the same period a year ago. The classified loan Tk 112.49 billion during the last six months of 2010.

The Daily Sun/Bangladesh/ 12th March 2012