Prime Bank writes off Tk 300 crore loan

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In order to clean its balance sheet, Prime Bank wrote off Tk 300 crore embezzled by Bismillah Group.

“The legal process to recover the money is also ongoing,” said Ahmed Kamal Khan Chowdhury, managing director of Prime Bank.

Golam Rabbani, deputy managing director of the bank, said some other banks were also the victims of the Bismillah Group scam but only Prime Bank’s loan was secured by collateral.

“We have got court decree in our favor and we hope we will be able to recover a handsome amount of the loan by this year,” he said.

He spoke at a media briefing at Hotel Purbani in Dhaka organized to mark 22nd founding anniversary of the bank.

Chowdhury said the bank is now focusing more on fast-growing online banking.

‘We are planning to offer more web-based products for the customers,” he said, adding that the bank is expanding its footprint in rural areas as well.

He also said Prime Bank has developed a credit assessment system in line with the standards of global credit ratings agency Moody’s to prevent scams.
Speaking about the bank’s activities since its inception, the CEO said consumer banking has been at the heart of Prime Bank.

He said this is the best time for the investors to invest in home or automobile as Prime Bank has reduced the interest rate to affordable levels. According to Chowdhury, the default loan rate at the bank is high as it has lent more in the consumer banking segment.

Moreover, the central bank circular on loan classification issued in 2013 widened the default loan rate across the sector, he said.

The central bank amended the loan classification rules to bring them in line with global standards.

The default loan of Prime bank was 6.36 percent last year against the sector’s average of 9.23 percent, according to Bangladesh Bank data.

The banking sector’s average default loan may rise in the January-March quarter as BB has instructed banks to show the loans which have still remained unclassified thanks to stay order from courts as classified, according to Chowdhury.

Bismillah Group, which used to make terry towels for the export market, embezzled Tk 1,100 crore from five local banks with the help of bank officials between June 2011 and July 2012.

The five banks intended to sell the properties Bismillah Group had used as the security to secure the loans.

Source: New Age

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