The central bank sits with top executives of nine new private commercial banks today (Monday) to review their overall performance -- with the issue of bad loans topping the agenda.
Officials said the Bangladesh Bank (BB) could raise a host of issues, including that relating to uptrend in classified loans along with advance-deposit ratio (ADR) of the new banks.
The amount of non-performing loans (NPLs) of the nine banks jumped by more than 43 per cent or Tk 1.69 billion in the third quarter (Q3) of the current calendar year over that of the previous one.
The volume of classified loans rose to Tk 5.61 billion as on September 30 last from Tk 3.92 billion three months ago. It was Tk 444 million as on December 31, 2015.
A comparative analysis of the nine banks between September 30, 2016 and June 30, 2016 shows that the amount of NPLs with two of the new PCBs increased significantly while the volume of another two took a downturn and one's NPL burden remained unchanged.
At the meeting, the new banks might be asked to strictly abide by the existing core risk-management guidelines for improving their efficiency.
The central bank earlier had identified six core-risk areas on the flipside of the country's banking sector.
The risk factors involve credits, asset and liability, foreign exchange, information technology, internal control and compliance, and money laundering.
BB governor Fazle Kabir will chair the meeting, where chief executive officers (CEOs) and managing directors (MDs) may seek policy support from the central bank for expansion of their branch networks.
At the meeting, the CEOs of the banks will urge the central bank for relaxation of the branch-expansion policy for allowing them 2:1 ratio instead of the existing 1:1 for opening urban and rural branches.
"We need the relaxation of the branch-expansion policy that will help profitability of the new nine PCBs," the CEO of a new PCB told the FE in the run-up to the stocktaking meeting.
He also said: "We'll also request the central bank to allow more bank branches in the capital, Dhaka, and other divisional headhunters to facilitate our businesses."
The nine banks are Meghna Bank Limited, Midland Bank Limited, Modhumoti Bank Limited, NRB Bank Limited, NRB Commercial Bank Limited, NRB Global Bank Limited, South Bangla Agriculture and Commerce Bank Limited, The Farmers Bank Limited and Union Bank Limited.
The bunch of new PCBs started off in 2013 with an avowed aim of bringing more unbanked people into the banking network.
siddique.islam@gmail.com
NPL overhang tops agenda
Siddique Islam | Published: November 21, 2016 00:00:00 | Updated: February 01, 2018 00:00:00
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