State banks continue to top the default charts, with one bank even having 57 percent of its outstanding loans as bad loans, according to the data disclosed by Finance Minister AMA Muhith in parliament yesterday.

Muhith presented the default loan data when lawmakers quizzed him about it during a question-answer session.

At the end of March, BASIC Bank had the highest default loan ratio among the five state-owned commercial banks.

BASIC Bank's total outstanding loans stood at Tk 8,964 crore, of which Tk 5,080 crore are bad ones. The scam-hit bank's actual default loans are more than what the bank revealed.

As of December 31, 2014, it had total classified loans and advances of Tk 8,108 crore. Of the amount, Tk 2,999 crore was transferred to the classified block assets account with permission from Bangladesh Bank.

Accordingly, the amount of classified loans and advances shown in the financial statements came down to Tk 5,109 crore.

Muhith said the government has taken a number of steps to realise the default loans. The government thinks the steps are adequate for the purpose. For instance, the government has signed an annual performance contract with the state-owned banks, where the highest emphasis has been laid on recovering the bad loans.The default loans of Sonali, Agrani, Bangladesh Development Bank, Rajshahi Krishi Unnayan Bank ranged from 19 percent to 43 percent, according to the data released by Muhith in parliament. 

The government has been providing money to state banks every year from the taxpayers' money. In the current fiscal year, Tk 5,000 crore has been earmarked for capital for state banks.

In the next year's proposed budget also, there is likely to be another Tk 5,000 crore for the same purpose.

The bank officials said the situation of the banks deteriorated seriously due to appointment of directors on political consideration after 2009.

Although capital was provided to the state banks from taxpayers' money no action was taken against those involved in various irregularities, a Bangladesh Bank official said.

The BB several times recommended steps against Abdul Hye Bacchu, the former chairman of BASIC Bank, but no action was taken, the official said.

AUDIT OBJECTIONS

There are 853,314 unsettled audit objections against 55 ministries or divisions, involving Tk 615,606 crore, which is almost double the budget for the next fiscal year, Muhith said in parliament.

The audit objections remain unsettled for many reasons, including the delay caused by the executive branch in responding to the objections. Objections take a long time to be settled due to a lack of proper information and evidence, he said.