Rejaul Karim Byron

Default loans continued to rise in the second quarter -- by Tk 643 crore or 2.66 percent -- due to sluggish activities in the industrial sector and unhealthy competition among some private banks.

On June 30, banks recorded default loans of Tk 24,384 crore of their outstanding loans, up from Tk 23,752 crore on March 30, according to Bangladesh Bank statistics.

In the first quarter to March, default loans rose by Tk 1,043 crore or 4.59 percent.

In percentage, however, default loans went down slightly because of a rise in outstanding loans.

On June 30, the total amount of default loans was 7.14 percent of their outstanding loans -- down from 7.27 percent in March.

Default loans of all private commercial banks, state-owned commercial banks and foreign commercial banks increased, except for the specialised banks, but the rise was the highest among the private banks.

However, default loans of all the private banks, except two, were low -- below 5 percent.

In June, default loans of the state banks rose by Tk 125 crore compared to March, according to the central bank statistics. Such loans in state banks increased by Tk 592 crore and in the foreign banks by Tk 37 crore.

But default loans of the specialised banks went down by Tk 124 crore during the same period compared to that in March.

Krishi Bank Chairman Khondker Ibrahim Khaled said performance in the manufacturing and housing sectors slowed, which trapped the loans in these sectors.

He also said money of some banks, especially of the private ones, got stuck in the stockmarket after a fall in prices there. He said another reason for a rise in default loans may be the weakness of the banks in monitoring the loan recovery activities.

Due to an unhealthy competition, some banks do not put adequate efforts to realise default loans from some parties.

A senior executive of a private bank supported the views of Khaled, and said many customers do not pay loans timely and the banks concerned also do not put any pressure on them.

Khaled also said, in this context, if the BB approves some more new banks to be set up the unhealthy competition will rise. He said, instead of giving approval to new banks the central bank should intensify monitoring of the existing banks.

News: Daily Sun/ Bangladesh/ Aug-17-2011

The Central Bank advanced one step forward towards its automation process as the Governor Dr Atiur Rahman formally launched the online Credit Information Bureau (CIB) reports on Tuesday.

The system will reduce the whole report processing time to only few clicks of computers from around seven valuable working days, along with ensuring transparency and keeping loan defaulters away from getting fresh loans through any loopholes, BB officials hoped.

Banks and financial institutions will now be able to access the CIB database online to get the credit report of the concerned borrower. The database will consist of detailed information of individual borrowers, owners and guarantors.

CIB report, the dynamic and hassle-free system, is considered a pivotal component of risk management measures.

Online CIB will minimise the extent of default loan by facilitating the banks and financial institutions with credit reports of the loan applicants very quickly, and therefore, lending institutions would not encounter any credit risk while extending lending or rescheduling facility, the BB Governor said. “The CIB online service will play a pivotal role in creating a disciplined environment for borrowing. Risk management will be more effective as it’s an improved and efficient system,” Atiur said.

He also hoped that the system will assist the election commission in finding out the loan status of the candidates competing in national and local elections, apart from increasing banks’ expertise.

Currently, the number of borrowers in the country is more than 9.2 million and the BB daily receives around 6,000 applications for CIB reports.

Though only five days were stipulated for every procession, BB officials sweltered to do the job even in 20-25 days for shortage of manpower and manual handling.

But the introduction of the online system will reduce their work pressure and they will be able to utilise their skills elsewhere as the time consumption to get the job done will come down to only five minutes.

News: Daily Sun/ Bangladesh/20-july-2011

Bangladesh Bank is going to introduce online Credit Information Bureau (CIB) reports of banks and financial institutions this week that would bar loan defaulters from contesting elections. Talking to BSS today, Chief Election Commissioner (CEC) Dr ATM Shamsul Huda welcomed the central bank’s new initiative.
“Online CIB reports would help the commission to identify the loan defaulters and take prompt decision in canceling their nomination papers,” said the CEC.
In the past, the EC had to wait for days to get information about loan defaulter candidates and many candidates had won the elections by keeping the commission, the banks and financial institutions in the dark.
From now on, loan defaulters would not be able to hide information from the Election Commission (EC) and the concerned bank and financial institution the central bank opens the much- awaited online CIB report service on July 19. Governor of the central bank Dr Atiur Rahman is expected to inaugurate the service at its Motijheel head office. All 47 banks and 39 other financial institutions would be able to collect CIB report using this online service.Following the existing law of the land, the CIB report will include the name of an individual who has defaulted repayment of at least Taka 50,000 loan, bank sources said.

News: The Independent/ Bangladesh/ July-17-2011

Bangladesh Bank (BB) will start providing online information of its Credit Information Bureau (CIB) reports to banks and non-banking financial institutions (NBFIs) from July 19, which will make faster the lending services and will eventually cut the cost of doing business. BB Governor Dr Atiur Rahman will inaugurate the online service at the central bank’s headquarters in the capital city, bringing an end to the manual, time consuming and cumbersome process of sharing the important credit information among banks and financial institutions.
All the 47 banks and 29 NBFIs of the country will be able to collect the online CIB reports on July 19 and onwards. The banks and financial institutions would also be able to collect the CIB reports from the central bank physically if they want, the central bank officials said.
“This is a part of the continuous process of digitizing the central bank and the country’s banking sector to ensure efficient, faster and transparent services to the people,” Dr Rahman told BSS today. He said the online service will make the CIB reports only a click away, which now takes five to seven days.
The report, however, used to take at least three months before Dr Rahman was made the governor. The governor said the faster CIB reports would cut the cost of doing business when the banks, NBFIs and respective persons would get it without going to the persisting hassles and longer time-frame. “The Election Commission (EC) and other government organizations and agencies can also get necessary information to determine whether any particular person is a loan defaulter or not,” he said, observing that this convenient and accurate information would help combat credit related corruption.
Besides, Dr Rahman said the central bank would ensure better use of its manpower after introducing the online CIB reports as only five to seven staff can handle the entire system whereas few hundred people are now doing the jobs. The governor said the huge manpower, which is now busy in handling over 5,000 CIB reports every month, would be use their skill in other necessary services of the central bank.

News: The Independent/ Bangladesh/ July-12-2011

Bangladesh Bank would introduce E-Payment Switch and E-Payment Gateway soon to make financial transitions easier, BB Governor Dr Atiur Rahman said yesterday.

“The central bank will introduce E-payment Switch with World Bank fund and E-payment Gateway will be set up with our own financing,” he said while addressing the launching programme of web portal ‘Akhoni.com’, a digital marketing and e-commerce website, at a hotel in Dhaka.

Through using the website, visitors will be able to get discounts from popular businesses and services which include restaurant, hotel, theatre, fashion house, internet service, transport, beauty parlor, saloon and others.

Customers can sign up to get regular deal alert through their e-mail free of cost. They can receive the deal voucher instantly on their web browser and through e-mail by making payment instantly using VISA, MasterCard and DBBL Nexus card or can also choose to book the deal online and pay cash when the coupon is delivered to their home. In that case, customers will have to show the voucher at the merchant location to enjoy the offer.

Speaking as chief guest Dr Atiur hoped that the online marketing website benefit the youngsters to market their products.

Shameem Ahsan, CEO of Akhoni.com, said, “At the age of E-commerce revolution, formation of Akhoni.com is not just a mere need of time. We believe that the website will be the medium for a more competent Bangladesh.”

Former Presidents of Bangladesh Association of Software and Information Services (BASIS) A Towhid, Habibullah N Karim, Swroar Alam and Rafiqul Islam Rowly, among others, were present on the occasion.

News: Daily Sun/ Bangladesh/ Jun-12-2011