Nazmul Ahsan
The state-owned commercial banks (SCBs) expect to improve their loan recovery position in the current calendar year, 2011, following the recruitment of more officials by them to make an effective drive for reducing the amount of classified loans in their aggregate credit portfolio.
The four SCBs -- Sonali, Janata, Agrani and Rupali -- appointed about 5,000 senior and other officers in 2010, a top official in the MoF said.
"Our cash recovery, amounted to about Tk 3.10 billion in 2010 due to strengthening of monitoring operations by the board of directors and the Ministry of Finance (MoF) and the newly-recruited officials have also been playing a positive role in realizing bad loans from the clients," Abdul Hamid Miah, managing director, Agrani Bank Ltd. told the FE.
He said above 1200 officials were recruited by Agrani Bank in 2010, bringing about some positive changes about collection of bad loans and adding value to the banking business.
Almost a similar picture is available about three other SCBs, banking sources said.
The percentage of default loans for the four banks went down to 15.66 per cent in December 31, 2010 from 21.38 per cent in December 31, 2009, the latest published data of the country's central bank -- Bangladesh Bank (BB) -- showed.
Despite this success about reducing non-performing loans (NPLs), the percentage of bad loans of the SCBs still remains at a higher level than that of private commercial banks (PCBs) and foreign commercial banks (FCBs) respectively. But the performance of the four SCBs is still better than that of four specialised banks that are also owned by the government, the BB data showed further.
The amount of classified loans in four SCBs declined by about Tk 10 billion to Tk 107.57 billion as of December 31, 2010 compared to the amount one-year back, the BB's latest compiled data further revealed.
They showed that the amount of bad loans with private commercial banks (PCBs), in terms of percentage of their total credit portfolio, declined from 3.92 to 3.15 during the same period.
However, in absolute figures, such loans of PCBs increased by Tk 2.54 billion to Tk 64.30 billion in 2010 in one-year period.
Lack of intensive monitoring, inadequate attention to proper selection of borrowers and loan disbursements to clients at a level more than the required or safe limit are some of the major reasons for this situation, according to some bankers in the PCBs.
They, however, are optimistic about improvement in the situation while stating that the problem on this count is still not worrying.
"The PCBs will need to enhance their monitoring performance about both loan disbursement and recovery to ensure a better financial health. Besides, the selection criteria about borrowers should get the priority while disbursing loans," Muhammad Ali, managing director, Social Islami Bank Ltd, told the FE.
In terms of aggregate amount, classified loans in the whole banking sector increased by Tk 2.28 billion to Tk 227 billion in 2010 over that of the previous year, the BB data showed.
But such default loans, relative to the credit portfolio, declined from 9.21 per cent to 7.27 per cent during the period under report because of an increased amount of loan disbursement by all the scheduled banks in 2010 over that of 2009.
According to the statistics of the BB, the total classified loans of four state-owned specialised banks amounted to Tk 49.68 billion on December 31, 2010, compared to Tk 42.10 billion a year back.
Default loans of the specialised banks -- Bangladesh Krishi Bank, Bangladesh Development Bank Ltd, Rajshahi Krishi Unnayan Bank and BASIC Bank -- declined, however, to 24.15 per cent of their credit portfolio in 2010 from 26.91 per cent in 2009, the central bank figures showed.
The amount of default loans of nine FCBs also increased by Tk 830 million to Tk 5.53 billion in 2010 over that of 2009, the BB data further showed.
NPL situation improves in SCBs
Nazmul Ahsan | Published: March 19, 2011 00:00:00 | Updated: February 01, 2018 00:00:00
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