Only 8% of targeted defaulted loans recovered, governor disappointed

The central bank governor has expressed his displeasure as the four state-owned banks – Sonali, Janata, Agrani and Rupali – have so far only managed to recover Tk 133 crore against the fiscal year target. Tk 1,610 crore of delinquent loans.

For the disbursement of loans, the governor asked the general managers of public banks to prioritize small loans over large ones to revive the economy. At the same time, the head of the central bank asked them to take stricter measures to recover large defaulted loans.

Governor Fazle Kabir has also expressed his dissatisfaction with the delay of public banks in disbursing loans to CMSMEs and agriculture sectors. Of all public banks, Janata Bank’s lending to the CMME sector was the lowest.

The governor addressed the issues on Sunday during a review meeting of four government banks with the Bangladesh Bank on Sunday.

Expressing concern over the default and capital shortfall of public banks, Fazle Kabir called for immediate action to reduce it, an official said.

The governor ordered banks to provide timely information to the CIB.

According to central bank data, state-owned banks hold 43% of total loan defaults in the banking sector, which stands at Tk 44,977 crore.

The amount of loans in default of Sonali Bank at the end of December 2020 was Tk 10,767 crore, which increased to Tk 11,959 crore at the end of December 2021, representing an increase of 11% in loans in default.

Janata Bank’s total loan default at the end of December 2020 was Tk 13,736 crore, which fell to Tk 12,322 crore at the end of December 2021 – a 10% decline in one year.

At Agrani Bank, the total default amount at the end of December 2020 was Tk 6,472 crore, which rose to Tk 9,987 crore at the end of December 2021, an increase of 54% year-on-year.

At Rupali Bank, the total default amount at the end of December 2020 was Tk 3,972 crore, which increased to Tk 6,666 crore, an increase of 68% in one year.

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