Bangladesh Bank (BB) has asked two state-owned specialised banks (SBs) for taking effective measures immediately to reduce the volume of classified loans and improve their respective financial health, officials said.
Bangladesh Krishi Bank (BKB) and Rajshahi Krishi Unnayan Bank (RAKUB) have also been instructed to improve their financial health through expediting loan recovery drives across the country.
The overall non-performing loans (NPLs) in the two banks increased by more than 10 per cent or Tk 5.29 billion to Tk 58.17 billion in the fiscal year (FY) 2015-16 from Tk 52.87 billion at the end of previous fiscal year.
The instructions were given at a meeting at the central bank headquarters in the capital Monday, with BB Deputy Governor Abu Hena Mohd. Razee Hassan in the chair.
The chief executive officers (CEOs)-cum-managing directors (MDs) of the public sector banks were present.
The meeting reviewed the progress of implementing the memorandums of understanding (MoUs) and key financial indicators of the two banks dedicated to promote the agriculture sector.
The central bank had earlier signed the MoUs with the management of the SBs to improve their financial performance by providing policy support.
According to the BB officials, The SBs faced capital shortfall in the FY16 mainly due to the increased volume of their classified loans.
The aggregated capital shortfall of the two banks increased by over 14 per cent or Tk 10.13 billion to Tk 81.14 billion in June 2016 from Tk 71.01 billion in June 2015.
The meeting also reviewed other issues, including recovery position of default loans, liquidity situation, credit growth, operating expenses and cost of funds of the SBs.
   siddique.islam@gmail.com
BB asks BKB, RAKUB to reduce default loans
Siddique Islam | Published: October 25, 2016 00:00:00 | Updated: February 01, 2018 00:00:00
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