WB to assess implications of SoCBs' capital losses

FE Team | Published: August 02, 2013 00:00:00 | Updated: February 01, 2018 00:00:00

Syful Islam Concerned at the capital losses of state-owned commercial banks (SoCBs), a monitoring mission of the World Bank is due in Dhaka tomorrow (Saturday) to assess their potential implications, especially for the rest of the banking system, sources said. "The mission is prompted by the recent loss of capital in the SoCBs," wrote the coordinator of a five-member team, Mohammad Baharul Alam, in a letter to the ministry of finance (MoF). Sources said the Bangladesh Financial Sector Monitoring Mission during their stay here from August 3-8 would have several meetings with government officials to discuss the SoCBs' performance. "The main objective of the monitoring mission is to get a better understanding of the issues affecting the stability and soundness of Bangladesh's financial sector in the light of emerging stress and challenges facing the banking sector in general and the SoCBs in particular," the letter mentioned. The team members include lead financial sector specialists Shamsuddin Ahmad and Niraj Verma, financial sector specialist Shah Nur Quayyum, lead financial sector specialist Damodaran Krishnamurti and programme assistant Bridget Rosario. During the visit, the team will meet officials of the Bank and Financial Institutions Division, the Economic Relations Division, the central bank and other relevant stakeholders. Statistics shows that the Sonali Bank and the Janata Bank incurred losses-Tk 12.77 billion and Tk. 5.42 billion respectively-in 2012. But the Agrani Bank and the Rupali Bank made profits-Tk 6.77 billion and Tk 1.31 billion respectively-in the same year. A senior MoF official said the SoCBs had been incurring losses for a long time because of mismanagement and some voluntary activities these carry out on behalf of the government. Besides, he said, under the influence of government high-ups, these banks have to offer loans to vested quarters which finally lead to default loans causing financial losses to the banks.