NPLs with industries rise in last fiscal year

Siddique Islam | Published: September 28, 2016 00:00:00 | Updated: February 01, 2018 00:00:00

Classified loans belonging to the industries increased by more than 32 per cent to Tk 250.68 billion in the fiscal year (FY) 2015-16 for lax repayment by the debtors.Â Â Â Â
Official sources also pointed out slower recovery drives by banks and financial institutions were responsible for substantial rise in their non-performing assets.
The non-performing loans (NPLs) of industrial sector rose to Tk 250.68 billion in the FY 16 from Tk 189.01 billion in the previous fiscal, according to the central bank's latest statistics.
"We've asked the banks and non-banking financial institutions (NBFIs) to reduce the amount of classified loans in the industrial sector through strengthening their recovery drives across the country," Nirmal Chandra Bhakta, executive director of the Bangladesh Bank (BB), told the FE Tuesday.
He also said the BB had already expedited monitoring and supervision to ensure proper use of industrial credits.
The central bank earlier issued letters to the banks and non-banking financial institutions (NBFIs) which have over 10 per cent NPLs out of their total outstanding industrial loans, advising them to expedite their recovery drives.
Total outstanding loans in the industrial sector increased by 22.82 per cent to Tk 3039.84 billion in the FY 16 from Tk 2475.04 billion in FY 15, the BB data showed. Meanwhile, disbursement of the overall industrial credits covering working capital and term loans increased nearly 21 per cent to Tk 2648.88 billion in the last fiscal from Tk 2193.30 billion in FY 15.
The estimate includes disbursement of fresh credits, the rescheduling of term loans and fund release for balancing, modernisation, rehabilitation and expansion (BMRE) of industrial units.Â Power, telecommunications, pharmaceuticals, textiles, garment and transportation sectors had received the lion's share of the credits, according to senior officials of commercial banks.
"The disbursement of overall industrial loans may increase further in the coming months if the government ensures better supply of gas and electricity to the industrial units," a senior official of a leading private commercial bank told the FE.
On the other hand, the recovery of the industrial loans increased nearly 17 per cent to Tk 1979.88 billion in the last fiscal from Tk 1693.95 billion in the previous year.
Â Â Â siddique.islam@gmail.com