The finance ministry’s warning, central bank’s vigil and appointment of observers have not been enough to stop unrecovered loans of state-owned BASIC Bank from rising.
A report of the bank shows it has failed to recover loans to the tune of Tk 20.22 billion this year until November. By the end of September it was Tk 18.63 billion which means in just two months the unrecovered loan amount jumped by Tk 1.59 billion.
By September-end, default loans accounted for 18.43 percent of the total credit disbursed but in Nov it increased to 20 percent.
According to the report, of the default loans worth Tk 13.49 billion has turned into bad debts which have no chance of recovery.
The bank has classified credit amounting to another Tk 8.09 billion as Special Mention Account (SMA), meaning their repayment may be defaulted.
The bank disbursed loans amounting to Tk 102.12 billion by September-end and Tk 101.50 billion by the close of November.
As of Nov 30, its capital deficit stood at Tk 6 billion and provision deficit at Tk 3.03 billion.
BASIC Bank Managing Director Kazi Fakhrul Islam could not be reached by telephone for comments. The text messages sent to him also went unanswered.
He could not be contacted even through the bank’s Public Relation Officer Harun-or Rashid.
A Bangladesh Bank probe has found that BASIC Bank disbursed loans to dubious borrowers after the incumbent board of directors took office.
The Bangladesh Bank in a report says it discovered irregularities in disbursement of loans amounting to around Tk 20 billion by the commercial bank’s Dilkusha, Gulshan and Shantinagar branches.
The central bank stopped credit release to several borrowers following the discovery.
BASIC Bank, already plagued by default and bad loans, on July 16 had signed a memorandum of understanding with the central bank to increase loan recovery and cut defaults on loans.
The finance ministry also warned the bank management against rise in defaulted loans.
Source: Bd news24
