Bad loans increased by Tk 7,282 crore or 1.58 percentage points in the third quarter this year as a significant amount of loans related to the recent incidents of scams was classified.

The central bank is putting pressure on the banks to get the real picture of their loan defaults.

On September 30, the total amount of bad loans in the banking sector was Tk 36,282 crore or 8.75 percent of the total outstanding loans.

The amount was Tk 29,000 crore or 7.17 percent of total loans on June 30.

According to Bangladesh Bank statistics, the highest increase in such loans was in the state-owned commercial banks that saw a rise by Tk 3,746 crore in the third quarter.

The amount of total classified loans at these banks stood at Tk 15,518 crore on September 30.

The classified loans at the private banks also marked a rise, by Tk 3,280 crore during the same period, and reached Tk 13,585 crore.

Bankers said the central bank recently detected loan-related irregularities in some public banks, and put pressure on the banks to classify the loans.

Hall-Mark Group and some other businesses embezzled Tk 3,547 crore from Sonali Bank's Ruposhi Bangla branch on forged documents.

On November 18, Finance Minister AMA Muhith also said in parliament that a significant amount of funds was also embezzled through Sonali Bank's Gulshan and Agargaon branches.

The finance minister said incidents of forgery were also detected in the accounts of some customers of Rupali, Janata, Agrani and BASIC Bank.

According to BB statistics, the amount of bad loans increased by Tk 1,733 crore in Sonali Bank, by Tk 758 crore in Janata, by Tk 1,092 crore in Agrani, and by Tk 163 crore in Rupali Bank during the July-September period.

Though BASIC is not a state-owned commercial banks, it is run under the government's control. During the period, bad loans increased by about Tk 200 crore at BASIC Bank.

The entire amount of the money involved with the irregularities unearthed recently has not yet been classified and the loan defaults may increase further in December when these loans will be classified.

Pradip Kumar Dutta, managing director of Sonali Bank, told The Daily Star that Tk 400 crore, a portion of the loans taken by the Hall-Mark Group, was classified in September.

The rest of the amount is likely to

be classified in December this year,

he added.

On the increase in loan defaults, the Sonali Bank's chief executive said the amount of bad loans marked a rise as their recovery, write-off and rescheduling was less this year compared to the previous year.

He also said they wrote off around Tk 800 crore last year, but the amount was only Tk 2 crore so far this year.

Dutta also said, to realise the loans from the Hall-Mark Group, the bank has taken the Group's 88 acres of land as mortgage. The lands are worth about Tk 560 crore on conservative estimates made by the bank.

Another 45 acres of land are being taken as mortgage, said the official of the bank.

He said, as a result they hope to securitise about Tk 1,000 crore against the loans given to Hall-Mark.

A central bank official said the BB has tightened its supervision after the incidents of loan scams were detected in some state banks.

The central bank also identified irregularities in some private banks that have already classified the loans, leading to a rise in default loans in those banks, he said.

News: The Daily Star/Bangladesh/23-Nov-12

The Bangladesh Bank (BB) asked the financial institutions (FIs) to go by SEC rule on margin loan ratio set by the securities regulator in operating their subsidiary companies – merchant banks and brokerage houses. The margin loan is the credit provided by the merchant banks against securities held by the investors.

The central bank recommended that all the financial institutions should follow margin loan ratio in line with the SEC guidelines in managing their subsidiary companies, said BB in its statement issued on Wednesday.

On September 30, the Securities and Exchange Commission (SEC) has set new margin loan ratio for merchant banks and brokerage firms. It decided to bring down the ratio of share credit in phases.

Under the new guideline, the existing margin loan ratio at 1:2 will remain unchanged till June 30, 2013.

The ratio will come down to 1:1.5 from July 2013 and will remain effective until December of the same year. From January 2014 the ratio will be 1:1 and from July 2014 it will be 1:0.5.

News: The Daily Independent/Bangladesh/22-Nov-12

Hafiz Ahmed Mazumder, MP, Chairman, Board of Directors of Pubali Bank Limited unveils the cover of “Pubali Barta” at a function at the bank’s head office in Dhaka Wednesday.

Pubali Bank Limited (PBL) has unveiled a quarterly newspaper titled “Pubali Barta” containing all information of the bank.

Hafiz Ahmed Mazumder, MP, Chairman of the bank unveiled the cover of “Pubali Barta” as a chief guest at a function at the bank’s head office Wednesday, said a press release.

News: The Daily Sun/Bangladesh/22-Nov-12

Pubali Bank Ltd (PBL), one of the leading private commercial banks Wednesday donated Tk 500,000 to the Kidney Awareness Monitoring and Prevention Society (KAMPS), a voluntary organisation.

PBL has donated the amount to KAMPS with an aim to serve the distressed humanity through providing Kidney related services and raising awareness among the people across the country. Chairman of Pubali Bank, Md. Hafij Ahmed Majumder formally handed over a cheque for Tk 500,000 to Chairman of KAMPS, Professor Dr. Abdus Samad at a ceremony at the PBL head officein Dhaka.

Managing Director of Pubali Bank, Md. Helal Ahmed Chowdhury, Directors and central leaders of KAMPS were also present on the occasion.

KAMPS, a voluntary organisation, has been running awareness raising, monitoring and screening services about Kidney diseases through organising camps, seminars, symposiums, workshops, roundtable meetings across the country.

KAMPS has already set up a Kidney Dialysis center at Tangail and Kidney screening and research centre in Dhaka through the support of philanthropic personalities, organisations and institutions.

News: The Daily Sun/Bangladesh/22-Nov-12

BRUSSELS: Greece's international lenders failed for the second week running to agree how to get the country's debt down to a sustainable level and will have a third go in six days' time.

After nearly 12 hours of talks through the night during which myriad options were discussed, euro zone finance ministers, the International Monetary Fund and the European Central Bank failed to reach a consensus, without which emergency aid cannot be disbursed to Athens.

The IMF has so far refused to give Athens an extra two years to meet its debt target, while European governments led by Germany refuse to write off loans, two options which might make the targets easier to reach.

"We are close to an agreement but technical verifications have to be undertaken, financial calculations have to be made and it's really for technical reasons that at this hour of the day it was not possible to do it in a proper way and so we are interrupting the meeting and reconvening next Monday," Eurogroup chairman Jean-Claude Juncker told reporters.

"There are no major political disagreements," he said. Nonetheless, the euro extended its fall against the dollar in response, and German bond futures were higher as investors were expected to rush into the safe haven.

Prime Minister Antonis Samaras said the lack of a debt deal between the country's lenders over technical reasons did not justify holding up aid needed to avert Greek bankruptcy. Greece's next big debt repayment is due in mid-December.

News: The Daily Sun/Bangladesh/22-Nov-12