Two of crisis-ridden commercial banks' new managements were given Tuesday regulatory directions to improve their financial health through intensifying cash-recovery drives to recoup their soaring non-performing loans (NPLs).
The central bank's instructions came from the Bangladesh Bank Governor, Dr Ahsan H. Mansur, during parleys with the reconstituted boards of the two commercial banks, sources said.
As part of the BB-launched salvation moves to revitalise those banks of the country which got into troubles for past wrongs, the BB governor directed the instructions in meeting with the recently reconstructed boards of First Security Islami Bank (FSIB) and Bangladesh Commerce Bank (BCB) at the BB headquarters.
Amid severe cash crunch because of mass-scale loan-related irregularities, the central bank dissolved the then boards of the FSIB and BCB on September 01 and September 03 respectively before the reconstitution-as banking-sector reforms get going under the interim government.
During the meeting, the BB high-ups wanted to know the revival plans of the respective banks from the board members regarding deposit buildup, corporate governance and cash-recovery activities of the underperforming credits.
And board members of the respective commercial lenders shared their short-term, mid-term and long-term plans regarding their turnaround on all major financial indicators with the BB high-ups in the meeting, sources at the parleys said.
Talking to the FE, spokesperson for the central bank Husne Ara Shikha said the BB asked the two banks to improve their financial health immediately.
"We've also asked the banks to boost deposit portfolio with geared-up recovery drives to cut down NPs burdens," said Ms Shikha, also an executive director of the BB.
At the meetings, the banks also sought more liquidity support from the BB to run their day-to-day banking affairs during this critical period of time, according to the spokesperson.
When contacted, chairman of FSIB Mohammad Abdul Mannan said they shared the plans in detail with the central bank governor as to how they revive the unconventional bank towards a stable and stronger bank in respect of all major financial indicators in the next three years.
Sharing some of their plans, Mr Mannan said they aspired to increase the deposit accounts to 7.5 million by 2026 from the existing 3.0 million. It would cross 10-million mark by the end of 2027.
As part of the bail-in plan, he said, they want to see the bank one of the top five remittance-sourcing banks by 2026. To achieve the targets, they morally upped their entire manpower and engaged them to this end.
"In just one-and-a-half-month time of taking charge of the bank, we managed to open 100,000 deposit accounts and collected deposits amounting to Tk 7.0 billion," the experienced banker said about their redemption process so far.
At the same time, he said, they give utmost priority to cash-recovery drives that helped recover over Tk 6.0 billion during this period.
"We want to turn the bank into a strong one through converting the weakness to the strength. We will do it inshallah," he said on swearing over their mission.
Growing NPL buildup over the years puts the banks in serious liquidity dearth, which prompted the banking regulator to intervene to protect the interests of depositors.
FSIB's total outstanding of classified loans rose to Tk 26.90 billion until June last from Tk 19.87 billion recorded in June 2023 while BCB's overall classified loans climbed to Tk 13.32 billion in June 2024 from Tk 11.58 billion registered a year ago.
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