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.

Bangladesh and the Asian Development Bank (ADB) today signed agreements for $505 million in loans to further improve the country’s railway services that will help the national economy and boost sub-regional trade.

Senior Secretary of the Economic Relations Division (ERD) Mohammad Mejbahuddin and ADB Country Director in Bangladesh Kazuhiko Higuchi inked the deals at the ERD Auditorium in Dhaka.

“The assistance will help railways better serve needs of people and movement of goods, and help improve domestic and sub-regional trade,” said Higuchi.

“This project will also help improve the overall railway transport system in Bangladesh, and aims to reduce transport costs and improve logistics of strategic corridors, such as Dhaka–Chittagong link, for sub-regional trade.” he added.

The South Asia Sub-regional Economic Cooperation (SASEC) Railway Connectivity: Akhaura–Laksam Double Track Project will help upgrade the 72-kilometer Akhaura–Laksam section of the Dhaka–Chittagong railway corridor to a double track dual-gauge railway line, along with modern signaling equipment, an ADB statement said.

It also said the existing track will be upgraded in accordance with the requirements of the Trans Asia Railways network. Eleven railway stations will be reconstructed with special facilities for the elderly, women, children, and disabled. The project will also support capacity development for the permanent project management unit to be established in Bangladesh Railway and for accessing climate mitigation funding.

ADB said, the Akhaura-Laksam section is part of a major sub-regional corridor and of the Trans-Asia Railway network. The project was endorsed by the SASEC Trade Facilitation and Transport Working Group in a meeting held in Singapore on 30 October, 2013.

The total project cost is $805 million. The European Investment Bank (EIB) will co-finance the project with $175 million while the government will provide $125 million. The project will be executed by Bangladesh Railway and is expected to be completed by 2022.

The head of the European Bank for Reconstruction and Development (EBRD) said on Saturday his institution hoped to have its first joint projects with the new $100 billion China-led Asian Infrastructure Investment Bank (AIIB) in place by next year.

The EBRD was set up in 1991 after the fall of the Berlin Wall to help former communist countries, but its spread east in recent years to countries such as Mongolia means it is likely to overlap with the AIIB as it gets up and running.

"We are very keen to work together at the earliest possible opportunity," EBRD President Suma Chakrabarti said in prepared remarks to be delivered in Beijing. "We in the EBRD will be ready to present AIIB with several projects next year ripe for immediate co-financing."

He flagged infrastructure and energy efficiency projects as the most obvious areas where the two could work together, calling it "a historic opportunity" for all involved.

Md Quamruzzaman has been appointed country manager of National Bank of Pakistan in Bangladesh, it said in a statement yesterday.

Quamruzzaman is the first Bangladeshi to take up this assignment, and brings more than 25 years of experience with financial institutions such as Standard Chartered, AB Bank, Trust Bank, Premier Bank, Al Falah and IDLC, according to the statement.

He has worked in corporate banking, branch banking, credit risk management and service delivery, it said.