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Tell what’s behind rise in bad debt

Ministry asks SoCBs

FE Report | June 24, 2019 00:00:00

Finance ministry has asked six state-owned commercial banks (SoCBs) to identify the reasons behind the excessive rise in non-performing loans (NPLs) during the January-March period.

On Sunday, it wrote to the chief executives of Bangladesh Development Bank, Sonali, Janata, Agrani, Rupali and BASIC banks and asked them to take fit measures to curb NPL rise.

The directives were issued a day after finance minister AHM Mustafa Kamal placed in parliament the list of 300 top defaulters of bank loans.

"Defaulted loans have increased largely in three months (Jan to Mar) despite banks are asked to lower the NPL volume," reads the letter issued by finance division.

During the period, it said, Janata's NLPs rose by 42 billion, Agrani's by Tk 3.97 billion, Rupali's by Tk 2.40 billion, Sonali's by Tk 1.76 billion, BASIC's by 1.72 billion and BDBL's by Tk 133 million.

"…this is unexpected," the letter mentioned.

The banks have been asked to inform the ministry of their measures within five working days.

The volume of NPLs in the country's banking system until this March reached Tk 1.11 trillion.

Mr Kamal told parliament that the top 300 defaulters have swallowed Tk 509.42 billion worth of bank money.

Until last December, the number of total defaulters reached 170,390, up from over 58,000 in September 2015.

The total amount of bad loans also rose by 73 per cent to Tk 1.02 trillion during the period, Mr Kamal said in reply to a written query.

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