Concerned over unrelenting increase in the load of non-performing loan (NPL), the central bank Monday asked bankers to bring down the NPL below 10 per cent by the end of this month, sources said.
It also asked the bankers to go by the Bangladesh Bank instructions regarding charges and fees applicable against the services given to clients.
The instructions were given as allegation of collecting additional charges and fees mounted against different banks.
Bangladesh Bank deputy governor SK Sur Chowdhury, after a meeting with the bankers, told newsmen the central bank wants the NPL to come down below 10 per cent.
"We asked bankers to sit with clients to recover money and reschedule loans so that NPL comes down significantly," he said.
Mr Chowdhury said allegations have it that some banks doesn't follow central bank's instructions on charging fees and sometimes take more than rates fixed by the BB. "We asked them to follow the instructions accordingly and charge the fees according to directives."
He said issues like excise duty, taxpayer identification number (TIN) and interest rates on bank loans were also discussed in the meeting.
Association of Bankers, Bangladesh (ABB) chairman Ali Reza Iftekhar told newsmen the amount of NPL had gone up significantly because of the poor recovery performance of the state-owned banks and one private-sector bank.
"The private banks are trying their best to bring down the amount of NPL," he said.
Mr Iftekhar said bankers discussed extension of the facilities, offered in 2014 until next year, to borrowers regarding bringing down NPL.
Bankers in the meeting requested the central bank governor to allow them to offer dividend despite taking some waiver of conditions regarding NPL.
The governor said a decision in this regard will be given within a few days.
The amount of money banks need to put with the central bank as provision against NPL went up significantly due to the losses they had incurred from price fall of shares in the stock markets in 2010.
Bankers demanded that they be allowed to keep provision in 4 instalments against the losses from share-market debacle. It will reduce the amount against provision and banks' capacity to offer dividend will increase.
In the meeting BB governor Dr Atiur Rahman said the overall economic indicators remained in positive trend due to political stability in the country.
He said despite positive macroeconomic indicators, the NPL in banking sector has been on the increase. "I urge you all to take effective measures to bring down NPL before the current quarter ends."
Mr Rahman said the rate of interest on bank loan is reducing gradually but yet to go down to the expected level.
He said low-interest lending is needed to raise economic growth. "Until now, the loan interest rate is 12.49 per cent. I draw your attention for taking appropriate measures to reduce the rate of interest on industrial loan to a logical level."
The governor raised question about the big spread of interest on loan and deposit. "The tendency of making excessive profit needs to be eliminated," he said.
He said the central bank will soon announce the amended roadmap for implementation of guidelines of Basel III. Its implementation will start in January 2015 and end in December 2019.
"I am hopeful that we will be able to fully enforce Basel III regulation from the very first day of 2020."
syful-islam@outlook.com
BB advises banks to bring down NPL below 10pc
FE Report | Published: December 16, 2014 00:00:00 | Updated: November 30, 2026 06:01:00
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