The central bank is going to ask four state-owned commercial banks (SoCBs) to improve their financial health immediately by expediting recovery of classified loans, officials said.
Such clear message comes in line with the Bangladesh Bank's advice delivered before for checking 'fraud and forgeries'. A number of banks have already earned bad repute.
The instructions will be given at a meeting to be held at the central bank headquarters in Dhaka today (Sunday) to review compliance with the memorandum of understanding (MoUs) with the four SoCBs --- Sonali Bank, Janata Bank, Agrani Bank and Rupali Bank.
Bangladesh Bank (BB) Governor Dr Atiur Rahman will preside over the review meeting on the state of affairs of the state-run banks, the sources added.
The chief executive officers (CEOs)-cum-managing directors (MDs) and chairmen of the public banks are expected to attend the meet.
"We'll ask the SoCBs to improve their internal controls and compliance in line with the BB advice to check fraud and forgeries," a BB senior official told FE Saturday.
He also said the central bank will instruct the banks for taking necessary measures to properly implement the existing core-risk guidelines to minimise their financial risks.
The central bank had earlier identified six core-risk areas in the country's banking sector.
The risk factors are: credit, asset and liability, foreign exchange, information technology, internal control and compliance, and money laundering.
Talking to the FE, another BB official said the central bank will advice the SoCBs to expedite their credit flow to small and medium enterprises (SME) instead of large ones in order to minimise risk.
The banks will be asked to complete their automation process by the end of 2016 to ensure better services to their clients, the central banker explained.
Different issues, including recovery position of default loans, liquidity situation, credit growth, operating expenses, capital position in line with the Basel-III standard and cost of funds of the SoCBs, will come up for discussion at the stocktaking meeting.
The central bank earlier signed the MoUs with the managements of the SoCBs to improve their financial performance by providing policy support.
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