The four state-owned commercial banks rescheduled 43 percent less loans in 2016 than a year earlier thanks to their cautious approach and a strict stance by the central bank.

Sonali, Janata, Agrani and Rupali banks regularised loans amounting to Tk 2,582 crore last year, in contrast to Tk 4,544 crore in 2015, according to data from the Bangladesh Bank.

Sonali, the largest state-owned bank, rescheduled loans amounting to Tk 475 crore in 2016 -- 72 percent less than in the previous year. Janata rescheduled 34 percent less loans last year and Rupali 32 percent.

Agrani Bank, however, rescheduled more or less the same amount as in the previous year. It rescheduled Tk 540 crore in 2016 in contrast to Tk 512.89 crore a year earlier.

“The rescheduling declined as the banks classified fewer loans,” said Rupali Managing Director Ataur Rahman Prodhan.

Most of the bad loans were rescheduled in the last two years and banks are now putting in more effort to recover cash against those loans.

“Moreover, banks are more serious about nursing clients so they don't default. As a result, loan rescheduling has come down,” Prodhan added.

In recent months, the BB has also become strict in allowing loan rescheduling without the requisite down payment, said a senior executive of the central bank.  Before Fazle Kabir took charge as the central bank governor last year, banks were allowing loan rescheduling without taking the required down payment, he said.

But the new governor asked the respective department of the central bank to approve loan rescheduling proposals only after confirming the deposit of down payment, thus bringing down loan rescheduling significantly, the senior executive said.

Sonali, Rupali and Janata performed well in cash recovery from defaulters last year, according to a BB report.

Sonali realised 30.51 percent of its cash recovery target of Tk 4,400 crore from the top 20 defaulters in 2016. The rate was 10.55 percent in 2015. The cash recovery for Janata was 52.64 percent against 35.61 percent in 2015. Rupali achieved 69 percent of the target, whereas the rate was 9.33 percent a year ago. 

Agrani performed poorly, realising only 2.23 percent of the target of Tk 2,900 crore in 2016. The lender had managed to recover 22.36 percent of its cash recovery target in 2015, according to the central bank.

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