Bangladesh Bank Governor Dr Atiur Rahman has expressed dissatisfaction over various anomalies found in scheduled banks engaged in unhealthy practices, especially regarding interest rates offered for deposit and lending.

At a meeting with officials of Department of Banking Inspection (DBI) of the central bank Sunday, the governor said the entire banking sector will fall into peril due to risky investment by banks.

A BB high official, who attended the meeting, said the governor wanted to know why irregularities in scheduled banks are increasing despite the central bank’s repeated advice to avoid approving non-productive credit and to provide financial services following the guidelines. The official who wished to remain anonymous said the DBI officials reported that both the state-owned and private banks are engaging in bad practices over lending and mobilising deposits.

“The Governor has become worried over such irregularities found in scheduled banks and asked DBI officials to take firm stance on Bangladesh Bank guidelines and initiate punitive actions against bank managements which won’t abide by the rules,” said the official quoting the governor.

He said the BB inspection teams found a rise in classified loans in recent times. He said classified loans in the banking sector in May 2011 was 6.12 percent which now (May 2012) stands at 6.57 percent.

He said many loans have become classified because of inappropriate assessment of loan proposals.

The Daily Sun/Bangladesh/ 12th June 2012