Govt to sign performance deal with SoBs

FE Report | Published: February 05, 2015 00:00:00 | Updated: November 30, 2026 06:01:00

The government is going to sign performance contract with the state-owned banks (SoBs) to improve their financial health through strengthening management efficiency, officials said.
The Ministry of Finance (MoF) has already set 13 key indicators for the contract to improve operational performance of the SoBs.
The indicators include profit after tax, classified loan situation, cash recovery position, capital adequacy ratio, return on assets, automation status, and human resources development.
"The process of setting the target of indicators is under way," a senior official of MoF told the FE on Wednesday. "It will be revived on monthly basis."
He also said the Bank and Financial Institutions Division (BFID) of MoF is discussing the issue with chief executive officers (CEOs) and managing directors (MDs) of the SoBs as well as senior officials of the Bangladesh Bank (BB).
A meeting is scheduled to be held at MoF in this connection on February 10 with BFID Secretary M Aslam Alam in the chair.
"Signing of the performance contract will be discussed at the meeting," the MoF official said.
He also said draft of the performance contract will be sent to eight SoBs after completing official formalities.
Besides, issues like non-performing loans (NPLs) with eight SoBs and disbursement of agriculture loans against their respective targets will be discussed at the meeting.
The total amount of NPLs with the four state-owned commercial banks (SoCBs) rose to Tk 207.97 billion during the July-September period (Q3) of the last calendar year (2014) from Tk 197.19 billion in the previous quarter (Q2).
The classified loans with the four state-owned specialised banks surged to Tk 126.62 billion in the Q3 of 2014 from Tk 110.52 billion in the Q2, according to the central bank statistics.
Talking to the FE, a senior official of a leading SoCB said the amount of NPLs has decreased during the October-December period of 2014 (Q4) following rescheduling, write off and recovery.
Currently, the central bank is working to prepare the classified loan statement for the fourth quarter of 2014.
"We expect that the statement will be finalised within the next week," a BB senior official said.
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