Bangladesh Bank on Wednesday warned Agrani Bank for its failure to recover the defaulted loan from the top 20 defaulters in last year, said officials of the central bank.
The BB had set a target for the bank to recover the defaulted loan amounting to Tk 95 crore by 2012 but it (Agrani Bank) could realise only Tk 64 lakh in the period, they said.
The BB asked the bank to take necessary measures to keep the required provision against the defaulted loan as its provision shortfall stood at Tk 1,613.27 crore in 2012 from a provision surplus of Tk 14.90 crore in 2011.
The BB gave the instructions during a meeting with Agrani Bank with the central bank deputy governor SK Sur Chowdhury in the chair. The meeting was held at the BB headquarters in the capital.
The meeting reviewed the data till December 31, 2012 of the state-owned bank as per the memorandum of understanding signed between the BB and four state-owned commercial banks.
A senior BB official told New Age on Wednesday that the financial health of Agrani Bank had significantly declined in last year due to its increasing classified loan, provision shortfall and loss-making branches.
He said the defaulted loan had increased to Tk 5,166.40 crore as of December 31, 2012 from Tk 1,917.24 crore as of December 31, 2011.
The loss-making branches of the bank increased to 34 in last year from 9 in 2011, he said.
Agrani Bank even informed the BB in the meeting that it could not keep the required provision amounting to Tk 1,623.27 crore against its balance-sheet of defaulted loan till December 31, 2012.
Sur told reporters after the meeting that the BB had asked Agrani Bank to submit a business plan without further delay to develop its financial conditions.
The management of the state-owned bank has sought more time to adjust the provision shortfall as it could not feel up the shortage from its operating profit of 2012, he said.
The BB documents showed that Agrani Bank posted a net profit of Tk 668 crore in last year.
Another BB official said Agrani bank would have plunged in losses if it kept the required provision in last year.
Sur said Agrani Bank appealed to the BB that it would keep the shortfall of the provision in the coming months by adjusting its operating profit of the period.
The BB will consider the appeal on the basis of one-to-one case as some more banks also applied to the central bank seeking time to keep required provision, he said.
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.
Earlier on Sunday and Monday, the BB held separate meetings with the managements of Sonali Bank and Janata Bank and asked them to take some immediate steps to improve its classified loan position and streamline its loan allocation.
The BB is going to hold a meeting today with Rupali Bank, the other state-owned commercial bank.
The central bank, under the memorandum of understandings signed with the SCBs, holds meetings with their managements in every three months to review their operations and give necessary instructions to ensure discipline and transparency in the banks.
-With New Age input
