Govt issues 16-point directive to revamp RAKUB

FE Team | Published: January 25, 2013 00:00:00 | Updated: February 01, 2018 00:00:00

Syful Islam The government has issued a 16-point directive to Rajshahi Krishi Unnayan Bank (RAKUB) to revamp the ailing state-owned specialised bank, officials said Thursday. The bank has been suffering from acute capital shortage, liquidity crisis and incurring loss. Secretary to the Banks and Financial Institution Division Dr M Aslam recently visited some branches and projects under the zonal offices of Rajshahi and Chapainawabganj. He also had a meeting with the high-ups of the bank at its head office and gave the directives. The secretary asked the bank high-ups to expedite drive for deposit collection and set target for employees at every level. "Failing to achieve target will put negative mark on annual confidential report of the employees", he said. He asked each of the employees of the bank to open a savings account a day and hasten efforts to open current and other types of accounts. Asking the officials to be more cautions in loan sanction, Mr Aslam said: "Recovery of loans has to be ensured by the official concerned who makes recommendation. Once the loan becomes classified, official concerned has to take responsibility for recovery." He observed that the poverty alleviation programmes of RAKUB are not at the expected level. He instructed for raising loan sanction in favour of poor people and to ensure that insolvent people get loan. The secretary suggested sanctioning adequate loans to small and medium enterprises. He suggested seeking fund from the refinance scheme run by Bangladesh Bank (BB) in this regard. Dr Aslam suggested the bank officials to ensure regular monitoring of stocks of goods in the warehouses bought under pledge loans. "Steps can be taken to collect fund from World Bank, Asian Development Bank and Islamic Development Bank for pro-poor financing," he told the officials. Asking for computerisation of every branch of the bank by June 2014, the secretary suggested the officials to send revised proposal to the finance ministry. He asked for starting web based banking until online banking can be started and launching mobile banking for colleting and channelling remittance. Dr Aslam also asked the officials to strengthen ICC department of the bank so that any untoward incident can be avoided in future. He said loan documentation has to be done appropriately and adequate collateral has to be ensured. The secretary also asked for classification of loans according to the central bank rules. Dr Aslam asked the officials for preparing and implementing bi-annual plans to reduce the bank's rising capital shortage. According to the officials' the bank has to raise paid-up capital to a certain level in line with the Basel-2 guidelines. Officials said the banks need to raise capital in line with the Basel-2 guidelines. Until June last year the capital reserve of RAKUB was Tk 6.556 billion which stands at Tk 407 million after adjustment with Tk 6.149 billion cumulative loss and other necessary adjustments. Besides, the bank's capital shortage will stand at Tk 3.593 billion after adjustment against the required capital of Tk 4.0 billion. Until June last year, RAKUB's classified loan was 38.20 per cent or Tk 13.63 billion against average rate of 7.17 per cent classified loan in banking sector. The bank's provision shortage stood at Tk 1.117 billion in June last year. The central bank observed that cumulative loss of the bank is increasing gradually due to continuous operating loss and its dependence on BB's loan and the refinancing scheme is also rising. The bank is losing competitiveness and remaining behind other banks thus incurring a significant amount of loss instead of earning profit.