Seven banks including scam-hit BASIC and Sonali banks faced a provision shortfall of Tk 6,233.14 crore against their general and defaulted loans as of June 30, 2016.
The shortfall was Tk 5,352.56 crore as of December 31, 2015.
The other five banks which failed to keep required provision are Rupali Bank, Bangladesh Commerce Bank, National Bank, Premier Bank and Bangladesh Krishi Bank.
As of June 30, 2016, provision shortfall of BASIC Bank increased to Tk 3,651.31 crore from a shortfall of Tk 3,308.19 crore as on December 31, 2015, that of Rupali Bank rose to Tk 775.56 crore from a zero-shortfall and that of Bangladesh Commerce Bank increased to Tk 247.21 crore from a shortfall of Tk 223.02 crore.
The provision shortfall of Sonali Bank stood at Tk 1,092.90 crore as of June 30, 2016 against a shortfall of Tk 1,666,38 crore as of December 31, 2015.
Provision shortfall of National Bank decreased to Tk 89.21 crore from Tk 154.97 crore in deficit, that of Premier Bank increased to Tk 180.06 crore from a zero-deficit and that of Bangladesh Krish Bank stood at Tk 196.89 crore from a surplus amount of Tk 192.71 crore six months ago.
A BB official told New Age on Wednesday that the seven banks which saw provision shortfall had earlier suffered huge corruptions.
As a result, their provision shortfall continued to increase, he said.
As per the BB regulations, banks have to keep 0.50 per cent to 5 per cent provision against general category loans, 20 per cent provision against classified loans of sub-standard category, 50 per cent against classified loans of doubtful category and 100 per cent against classified loans of bad or loss category.
The seven banks which faced provision shortfall will have to count net loss at the end of this year if they fail to manage their required provision from the operating profit.
After keeping the provision with the balance sheet and paying corporate tax to the government, banks are allowed to enjoy net profit, the BB official said.
The central bank, however, has started a culture of rebating banks from keeping the provision instantly. So, banks are taking permission from the BB to keep the provision later.
Under the circumstances, the directors of the banks which are supposed to face losses enjoy profits, the BB official said.
The overall provision shortfall in the banking sector also increased to Tk 4,445.83 crore as of June 30, 2016 from that of Tk 4,283.37 Tk crore as of December 31, 2015, the BB data showed.
The provision shortfall in the state-owned commercial banks increased to Tk 5,507.47 crore as of June 30, 2016 from a shortfall of Tk 4,567.33 crore as of December 31, 2015.
The provision shortfall in the specialised banks stood at Tk 196.89 crore from a surplus amount of Tk 192.71 crore as of December 31, 2015.
The private and foreign banks, however, posted a surplus amount of provision.
The provision surplus in the private commercial banks stood at Tk 1,189.71 crore as of June 30, 2016 against Tk 51.99 crore as of December 31, 2015 and that of the FCBs to Tk 77.82 crore from Tk 39.26 crore.
Banks have to keep required amount of provision to mitigate financial risks, another BB official said.
Banks sanction and disburse loans to their clients from the depositors’ fund, so they (banks) have to keep the provision for the interest of their depositors, he said.
The BB will soon instructed the seven banks to keep required provision against their general and defaulted loans, the official added.
Source: New Age