The eight state-run banks held 59.04 per cent or Tk 36,709.95 crore of the total defaulted loans in the banking sector as of December 31, 2016 as they disbursed huge amount of loans to their clients violating rules, said officials of Bangladesh Bank.
Three out of the eight banks also failed to keep required provision against their disbursed loans and advances.
The eight state-run banks are: Sonali Bank, Janata Bank, Agrani Bank, Rupali Bank, Bangladesh Krishi Bank, Rajshahi Krishi Unnayan Bank, BASIC Bank and Bangladesh Development Bank.
The total classified loans in the country’s banking sector were Tk 62,172.32 crore as of December 31, 2016.
A BB official told New Age on Thursday that the defaulted loans in the banking sector including that in the state-run banks had earlier declined significantly in 2014 and 2015
as most of the banks rescheduled their defaulted loans by managing no-objection certificates from the central bank.
But, the rescheduled loans again became defaulted, fuelling the non-performing loans in the state-run banks.
The amount of defaulted loans and write-offs together in the eight state-run banks stood at Tk 59,391.96 crore at the end of 2016.
The state-run banks wrote off uncollectible loans amounting to Tk 22,126.83 crore as of September 30, 2016.
Banks are allowed to write off loans when those become defaulted loans of bad or loss category.
Banks have to file law suits with the Artha Rin Adalat against the defaulters and have to keep 100 per cent provision before writing off the loans.
According to the BB official, banks write off loans to show a lower portfolio of defaulted loans in their respective financial balance sheets, but the trend is harmful to the banks’ financial health.
The BB official said that defaulted loans in the banking sector would increase more as a number of banks disbursed loans with an intention of conducting corruptions.
‘The finance ministry has been appointing corrupt persons as managing directors and chairmen to the state-run banks that is raising irregularities and defaulted loans in the banks,’ he said.
The BB data showed that the defaulted loans in Sonali Bank increased to Tk 10,229.16 crore as of December 31, 2016 from Tk 8,100.35 crore as of December 31, 2015, that in Janata Bank to Tk 4,165.53 crore from Tk 2,829.57 crore, that in Agrani Bank to Tk 5,877.58 crore from Tk 4,224.08 crore and that in Rupali Bank to Tk 2,793.99 crore from Tk 1,549.41 crore.
The non-performing loans in BASIC Bank increased to Tk 7,229.32 crore as of December 31, 2016 from Tk 6,392.10 crore as of December 31, 2015, that in Bangladesh Development Bank to Tk 730.29 crore from Tk 649.43 crore, that in Bangladesh
Krishi Bank Tk 4,678.96 crore from Tk 4,070.07 crore and that in Rajshahi Krishi Unnayan Bank to Tk 1,005.12 crore from Tk 898.64 crore.
The three state-run banks which failed to maintain the provision against their loans and advances as of December 31, 2016 are Sonali Bank, Rupali Bank and BASIC Bank.
The overall defaulted loans in the banking sector rose by Tk 10,801.10 crore to Tk 63,365.28 crore in 2016 from Tk 51,371.22 crore in 2015, BB data showed.
Three out of the eight banks also failed to keep required provision against their disbursed loans and advances.
The eight state-run banks are: Sonali Bank, Janata Bank, Agrani Bank, Rupali Bank, Bangladesh Krishi Bank, Rajshahi Krishi Unnayan Bank, BASIC Bank and Bangladesh Development Bank.
The total classified loans in the country’s banking sector were Tk 62,172.32 crore as of December 31, 2016.
A BB official told New Age on Thursday that the defaulted loans in the banking sector including that in the state-run banks had earlier declined significantly in 2014 and 2015
as most of the banks rescheduled their defaulted loans by managing no-objection certificates from the central bank.
But, the rescheduled loans again became defaulted, fuelling the non-performing loans in the state-run banks.
The amount of defaulted loans and write-offs together in the eight state-run banks stood at Tk 59,391.96 crore at the end of 2016.
The state-run banks wrote off uncollectible loans amounting to Tk 22,126.83 crore as of September 30, 2016.
Banks are allowed to write off loans when those become defaulted loans of bad or loss category.
Banks have to file law suits with the Artha Rin Adalat against the defaulters and have to keep 100 per cent provision before writing off the loans.
According to the BB official, banks write off loans to show a lower portfolio of defaulted loans in their respective financial balance sheets, but the trend is harmful to the banks’ financial health.
The BB official said that defaulted loans in the banking sector would increase more as a number of banks disbursed loans with an intention of conducting corruptions.
‘The finance ministry has been appointing corrupt persons as managing directors and chairmen to the state-run banks that is raising irregularities and defaulted loans in the banks,’ he said.
The BB data showed that the defaulted loans in Sonali Bank increased to Tk 10,229.16 crore as of December 31, 2016 from Tk 8,100.35 crore as of December 31, 2015, that in Janata Bank to Tk 4,165.53 crore from Tk 2,829.57 crore, that in Agrani Bank to Tk 5,877.58 crore from Tk 4,224.08 crore and that in Rupali Bank to Tk 2,793.99 crore from Tk 1,549.41 crore.
The non-performing loans in BASIC Bank increased to Tk 7,229.32 crore as of December 31, 2016 from Tk 6,392.10 crore as of December 31, 2015, that in Bangladesh Development Bank to Tk 730.29 crore from Tk 649.43 crore, that in Bangladesh
Krishi Bank Tk 4,678.96 crore from Tk 4,070.07 crore and that in Rajshahi Krishi Unnayan Bank to Tk 1,005.12 crore from Tk 898.64 crore.
The three state-run banks which failed to maintain the provision against their loans and advances as of December 31, 2016 are Sonali Bank, Rupali Bank and BASIC Bank.
The overall defaulted loans in the banking sector rose by Tk 10,801.10 crore to Tk 63,365.28 crore in 2016 from Tk 51,371.22 crore in 2015, BB data showed.
Source: New Age