NCBs attain 5pc of loan recovery target

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The nationalised commercial banks (NCBs) in the first nine months of this year attained a meagre 5.37 percent of the target they set for recovering loans from their top 20 defaulters.

This was revealed at a meeting between Bangladesh Bank (BB) and the NCBs to review their performances during January-September period.

Four NCBs — Sonali, Janata, Agrani and Rupali Bank — had targeted to recover Tk 232 crore from their top 20 defaulters in 2006 while they have recovered only Tk 12.48 crore until September.

BB Governor Salehuddin Ahmed, who presided over yesterday’s meeting, expressed discontent over the poor performance of the NCBs, meeting sources said.

Top officials of the NCBs, on the other hand, apprised the central bank governor of their helplessness in the face of the defaulters’ persistent non-compliance with the banks’ instructions.

They said the banks have been facing problems in recovering the outstanding loans due to court’s stay orders following writ petitions filed by the defaulters.

The central bank officials asked the NCBs’ top brass to appoint skilled lawyers to have the stay orders vacated.

The BB officials suggested that the NCBs should take the advantage of the upcoming election by forcing the defaulters to reschedule their outstanding loans if they are to contest the polls.

The banks should step up their efforts to recover such loans before the election slated for January 2007, they observed.

The central bank officials also instructed the NCBs to strictly oversee the rescheduling of loans so that no defaulter could gain undue interest waiver.

Sonali Bank had a recovery target of Tk 154 crore whereas it was able to recover only Tk 45 lakh. Janata Bank recovered only Tk 13 lakh against a target of Tk 25 crore, Agrani Bank Tk 5.5 crore against Tk 18 crore and Rupali Bank Tk 6.4 crore against Tk 35 crore target.

Sources said the NCBs also failed to meet other targets such as reduction in operational costs, capital shortfall and the amount of classified loans.

The amount of classified loans has increased by Tk 2,125 crore during the period. Sonali Bank saw an increase of Tk 541 crore, Janata Bank Tk 305 crore, Agrani Bank Tk 223 crore and Rupali Bank Tk 1,056 crore.

Officials of Rupali Bank said their classified loans have increased sharply as the bank has categorised the loans under international standards.

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