Rejaul Karim Byron

Default rates declined compared to outstanding loans last year, but showed a slight rise in volume, as some banks could not rein in their bad loans.

According to Bangladesh Bank statistics, state banks succeeded in cutting their loan default rates, but private, foreign and specialised banks saw their bad loans shoot up.

In the overall banking sector, the defaulted loan situation has improved because of continuous monitoring by the central bank, said a BB official. However, in some banks, defaulted loans went up, resulting in a little increase in volume.

On December 31, 2010, the defaulted loans of the banks were Tk 22,709 crore or 7.27 percent of the outstanding loans. A year ago, it was Tk 22,482 crore or 9.21 percent of the outstanding loans.

The volume of total defaulted loans increased by Tk 227 crore or 1 percent last year compared to the previous year.

The central bank evaluates the loan default situation on a quarterly basis. The situation improved substantially on December 31, 2010 over the third quarter.

In the third quarter, the defaulted loans reached Tk 24,088 crore but the banks brought down the figure by around Tk 2,000 crore at the end of the year. The amount of bad loans in the banking sector is still huge if the loans being written off are taken into account.

According to the statistics updated until June last year, the banks wrote off bad loans worth about Tk 17,400 crore since June 2004. Of the amount, Tk 2,100 crore was written off in the last fiscal year. Following a central bank guideline, the banks for the first time introduced a system of writing off loans in 2003.

A BB official said the central bank is going to take various reform programmes in the banks which will further improve the default loan scenario.

The bank company act is going to be amended further to tighten monitoring of the commercial banks' activities, change the default loan definition, and further streamline the size and tenure of the banks' boards.

In the state banks, the percentage of the defaulted loans of their outstanding loans has come down to 15.66 percent on December 31, 2010, which was 21.38 percent a year ago. In amount, their defaulted loans decreased by about Tk 990 crore during the one year period.

An official of Sonali Bank said the government has formed a committee headed by Chairman of the bank Kazi Baharul Islam. The official said the four state banks have functioned on the basis of a common approach which had a positive impact on their performances.

In the private commercial banks, the defaulted loans came down to 3.15 percent of their outstanding loans in December 2010, which was 3.92 percent a year ago, but the volume of their defaulted loans increased by Tk 254 crore in the same year.

In volume, the defaulted loans of the foreign banks increased by Tk 205 crore, and in the specialised banks, the amount went up by Tk 758 crore.

A BB official said the defaulted loans of most of the banks went down, but the total bad loans increased as the amount of such loans was high in some banks.

News: The Daily Star /Bangladesh/15 Feb 2011

Md Zillur Rahman joined Bangladesh Development Bank Ltd (BDBL) as managing director on Sunday, the bank said in a statement yesterday.

A postgraduate in management from Dhaka University, Rahman was the deputy managing director of Janata Bank prior to joining BDBL. He also obtained a PhD degree in credit management.

In his banking career of 30 years, he also served Bangladesh Krishi Bank and Rupali Bank.

News: The Daily Star /Bangladesh/15 Feb 2011

Sonali bank Ltd will use Citycell Zoom Ultra, a mobile broadband internet service, for proving quick remittance transfer facility to its clients spread across the country and abroad.

The bank singed a memorandum of understanding (MOU) with Citycell at a city hotel yesterday to enable the service.

Under the agreement, Sonali Bank will use the internet service at its 230 branches at the initial phase and later it will be expanded to 1250 branches countrywide.

Golam Anjumanarul Islam, head of Business of Citycell and deputy general manager, IT division of Sonali Bank Ltd formally signed the agreement on behalf of their respective sides.

Officials hoped that the internet service will further facilitate country’s largest state-owned commercial bank to provide better service to its customers through automation.

Managing Director and CEO of Sonali Bank Humayun Kabir, Citycell CEO Mehbood Chowdhury, Citycell Chief Operating Officer David Lee, Chief Sales and Distribution Officer Mahboob Hossain and Chief Marketing Officer Kafil HS Muyeed, Sonali Bank Deputy Managing Director Atiqur Rahman, and General Manager of IT division ANM Masrurul Huda Siraji, were also present at the signing ceremony.

News: Daily Sun /Bangladesh/15 Feb 2011

CHITTAGONG: With a view to making small and medium entrepreneurs (SMEs) aware about loan facilities offered by banks and financial organisations, a two-day SME financing fair begins today in the port city.

Bangladesh Bank Governor Atiur Rahman will inaugurate the fair on the premises of Institution of Engineers Bangladesh (IEB), Chittagong at around 10:00am.

SME Foundation, in association with Bangladesh Bank (BB), is organising the fair. The fair will also be held in six other divisional cities in phases.

Thirty-two banks and non-banking financial organisations will participate in the fair, said the organisers at a press conference held at Bangladesh Bank, Chittagong conference room on Monday.

The main objectives of the fair are to raise awareness about SME loan facilities, create scope for SMEs to discuss loan related issues with bank officials, provide suggestions on SME projects and comparative idea on SME loans offered by banks and non-banking financial organisations, and develop investment-friendly relations among the bankers and SMEs, said SME Foundation Managing Director and Chief Executive Officer Syed Rezwanul Kabir.

SME stakeholders will be able to learn about the procedures and ways to get loans and other issues at the fair, he said.

News: Daily Sun /Bangladesh/15 Feb 2011

Islami Bank Bangladesh Ltd donated Tk 500,000 to the Federation of Chambers of commerce and Industries (FBCCI) to distribute warm clothes among the cold-hit people.

Mohd Shamsul Haque, deputy managing director of the bank, handed over a cheque in this regard to FBCCI President AK Azad recently, said a press release.

Nurul Fazal Bulbul, director of FBCCI and other high officials of Islami Bank, were present among others on the occasion.

News: Daily Sun /Bangladesh/15 Feb 2011