The country’s 12 scheduled banks including eight state-run banks held 69.42 per cent of the total defaulted loans in the banking sector as of June 30, 2014 as they disbursed significant amount of loans unlawfully to their clients, said Bangladesh Bank officials.
Five out of the 12 banks also failed to keep required provision against their disbursed loans and advances after the end of the second quarter of 2014 due to drop in their operating profits.
The 12 banks are Sonali Bank, Janata Bank, Agrani Bank, Rupali Bank, Bangladesh Krishi Bank, Rajshahi Krishi Unnayan Bank, BASIC Bank, Bangladesh Development Bank, Islami Bank Bangladesh, Prime Bank, National Bank and United Commercial Bank.
The defaulted loans in the 12 banks stood at Tk 35,646.70 crore, or 69.42 per cent of the total classified loans amounting to Tk 51,344.63 crore in the banking sector as of June 30, 2014.
A BB official told New Age on Thursday that the defaulted loans in the banking sector including that in the state-run banks declined significantly in the last quarter of 2013 after most of the banks had gone for rescheduling of their defaulted loans during two months before the national elections held on January 5 this year.
Businesses, mostly loyal to the ruling parties, and political leaders had gone for massive rescheduling of their defaulted loans just before the national polls, he said.
He said many political leaders had rescheduled their loans to participate in the national elections while both businesses and banks took the chance to reschedule the defaulted loans to show better performance in their balance sheets.
But, the majority of the clients who were allowed to reschedule their loans became defaulters again as they did not regularise their defaulted loans maintaining proper rules and regulations, he said.
Against the backdrop, the central bank’s relaxed rescheduling policy had not put any positive impact on the banking sector as the majority of the banks had misused the policy, the BB official said.
The defaulted loans in Sonali Bank stood at Tk 10,549.57 crore as of June 30, 2014, those in Janata Bank at Tk 3,527.74 crore, those in Agrani Bank at Tk 3,895.83 crore, those in Rupali Bank at Tk 1,746.07 crore, those in BKB at Tk 4,562.64 crore, those in RAKUB at Tk 1,460.48 crore, those in BASIC Bank at Tk 4,590.62 crore, those in Bangladesh Development Bank at Tk 438.20 crore, those in IBBL at Tk 2,199.58 crore, those in Prime Bank at Tk 956.65 crore, those in National Bank at Tk 844.26 crore and those in UCBL at Tk 875.06 crore.
The BB data showed that the classified loans in the banking sector stood at 10.75 per cent of the total outstanding loans of Tk 4,77,436.94 crore as of June 30, 2014. It was 8.93 per cent of the total outstanding loans of Tk 4,54,435.26 crore as of December 31, 2013.
The five banks which failed to maintain the provision against their loans and advances in the second quarter of 2014 are Sonali Bank, Rupali Bank, BKB, RAKUB and BASIC Bank.
Another BB official said the existing sluggish business situation amid the political uncertainty and the recent bank scams were the key reasons for the large amount of the defaulted loans in the 12 banks.
The banks sanctioned huge amount of loans without proper scrutiny which pushed up their defaulted loans, he said.
-With New Age input
