The number of loss-making branches of Agrani Bank increased by 70 per cent in three months to 58 as on March 31, 2013 from 34 as on December 31, 2012 as the defaulted loans in the bank soared in the period, said officials of Bangladesh Bank.
The number of loss-making branches of the bank was only nine as on December 31, 2011.
The BB officials said that the bank’s loss-making branches had plunged into a negative situation as they had to keep a large amount of provision against their defaulted loan.
Under the circumstances, the BB asked the bank to take necessary measures in recovering the defaulted loan to reduce the number of loss-making branches in the months ahead.
The instruction was made on Thursday during a meeting between Agrani Bank and the central bank. BB deputy governor Abu Hena Mohd Razee Hassan presided over the meeting.
The meeting reviewed the data till March 31, 2013, of the state-owned bank as per the memorandum of understanding signed between the BB and four state-owned commercial banks.
The BB earlier set a recovery target for defaulted loan of Tk 1,165 crore in 2013, but its achievement in the first three months of the year is far away from the target. The bank recovered only Tk 115.06 crore of defaulted loan in January-March of 2013.
The bank, however, was able to collect Tk 26.84 crore from its top 20 defaulters in the first three months of this year against an annual collecting target of Tk 117 crore set by the BB.
The BB data showed that the Agrani Bank had sanctioned and disbursed only Tk 77 crore in January to March, but its defaulted loan increased significantly in the period.
The outstanding loans and advances of the bank stood at Tk 19,852 crore as on March 31, 2013 from Tk 19,775 crore as on December 31, 2012.
The overall defaulted loan in the bank stood at Tk 5,591.82 crore as of March 31, 2013 from Tk 4,663.27 crore as of December 31, 2012 and the provision of shortfall of the bank
also increased to Tk 2,083.73 crore from Tk 1,266.80 crore.
For this reasons, the capital shortfall against the risk-weighted asset of the bank stood at Tk 2,120 crore as of March 31, 2013.
A huge amount of money of Agrani Bank is now stuck because of cases pending with the Artho Rin Adalat, a court dealing with credit disputes, which has made a liquidity crisis in the bank, a BB official, who attended the MoU meeting, told New Age.
The stuck money of Agrani Bank stood at Tk 5,287 crore as on March 31, 2013 with the Artho Rin Adalat in which 7,052 cases are now pending.
The BB asked the bank to take measures to recover the stuck money through the court, the official said.
The Agrani Bank, however, recovered Tk 47 crore by resolving 250 cases in the court in the first three months of 2013.
BB executive director Mohammad Naushad Ali Chowdhury and Agrani Bank managing director and chief executive officer Syed Abdul Hamid and other senior officials of the two institutions attended the meeting.
The central bank, under the memorandum of understanding signed with the SCBs, holds meetings with the bank managements every three months.
-With New Age input
