Banks asked to maintain normal banking activities with businesses

FE Team | Published: September 25, 2007 00:00:00 | Updated: February 01, 2018 00:00:00

FE Report
The Bangladesh Bank (BB) has asked the commercial banks to maintain normal banking activities with the businesses without taking into consideration the matter of corruption or criminal proceedings that might have any connection with them.
"The banks have nothing to do with the legal actions against any owner or owners of industrial group accused of criminal or corruption charges. But one should look at the matter of criminal cases in an objective and neutral way while rescheduling loans, sanctioning new loans and opening of letters of credit (LCs). The banks should discharge their functions on 'bank-client' relationship basis," the central bank said in a circular.
The BB issued the circular Monday and asked the chief executives of all scheduled banks to maintain the instructions about dealing with such businessmen or business groups.
The central bank has issued such directives after its attention has been drawn to the problems of transactions with the clients, who remain fugitive or under custody, following the government's on-going drives against corruption by the bankers at a bankers meeting held on September 16 last.
"We have advised the banks to take their own decision about dealing with the businessmen or owners of business groups, who are now detained or fugitive, on the basis of bank-client relationships to continue their business activities," Senior Executive Director of the BB Murshid Kuli Khan told reporters explaining the main objects of the circular.
He also said the central bank hoped that there would be dynamism in the overall business activities across the country following issuance of the circular.
The bankers also had expressed concern that the volume of default loans would rise further because some large companies were not servicing their loan accounts as owners of the business entities remained fugitive or detained.
Non-performing loans increased to 13.96 per cent of the total outstanding loans by the end of June last, which was 13.80 per cent in March, 2007 and 13.15 per cent in December 2006, according the central bank statistics.
Besides, at least two businesses groups earlier appealed to the government to save their industries and business units, which have already been affected due to the ongoing anti-corruption drives.
The government took the decision in consultation with the central bank to keep the activities of the businesses, owned by such businessmen or groups, normal, Murshid Kuli said.
The BB will monitor compliance of the banks with the instructions in dealing with such businesses to help bring dynamism in the country's overall economic activities.