0.24pc bank borrowers got 55pc loans in 2012

Merely 0.24 per cent of the total bank borrowers availed nearly 55 per cent of the entire loan facilities in 2012 amounting to Tk 5.01 trillion.
Besides, the number of borrowers of large loans in the banks grew by about 17 per cent during the period between 2008 and 2012 compared to that of general loans by about 9.0 per cent in the same period.
It was revealed in a study on 'Large Loan Financing by Banks in Bangladesh: Implications and Challenges', released at a seminar Thursday. Bangladesh Institute of Bank Management (BIBM) conducted the study and organised the seminar at its auditorium in the city.
Bangladesh Bank deputy governor Abul Quasem was present as the chief guest at the seminar while BIBM director general Toufic Ahmad Choudhury was in the chair.
Professor SA Chowdhury and BIBM lecturer Zakir Hossain presented the study findings at the seminar.
According to the study, the number of total borrowers in 2012 was 0.7 million while it was 0.68 million in 2011, 0.64 million in 2010, 0.56 million in 2009 and 0.48 million in 2008. The number of large borrowers was 1768 in 2012, 1424 in 2011, 1317 in 2010, 929 in 2009 and 817 in 2008.
In 2011, the percentage of large borrowers compared to total borrowers was 0.21 with about 52 per cent of the total loans, in 2010 it was 0.20 per cent with about 49 per cent of the total loans and in 2009 and 2008 it was 0.17 per cent with more than 45 per cent of the total loans respectively.
The study was conducted based on the CIB reports from 2008 until 2012.
An amount of Tk 500 million and above was considered as large loan in the study. Large loan amount increased by more than 19 per cent during the study period compared to the 15 per cent in case of loans.
The study showed the total loan amount of the banks for business increased during the five years under review. In 2012, total loan was Tk 5.02 trillion increasing from Tk 4.20 trillion in 2011, Tk 3.65 trillion in 2010, Tk 2.83 trillion in 2009 and 2.52 trillion in 2008.
On the other hand, total amount of large loan was Tk 2.74 trillion in 2012, Tk 2.17 trillion in 2011, Tk 1.78 trillion in 2010, Tk 1.27 trillion in 2009, Tk 1.14 trillion in 2008.
Speakers at the seminar expressed concern over the large amount of classified loan in the banking sector which may put it to a shock within next few years if the irregularities are not addressed properly. The classified loan amount in 2012 was the highest at Tk 490.87 billion with the maximum increase in the number of defaulters by 4.0 per cent during the five years under study. The number of default borrowers increased to 0.179 million in 2012 from 0.142 million in 2011, the study revealed.
Although default loans started dropping since 2008 and reached about 10 per cent in 2011, it drastically increased by about 13 per cent in 2012.
In his presentation, Zakir Hossain said the comparative position of funded and non-funded large credit shows that the growth of large loan is higher than the total credit growth and growth of non-funded large credit is higher than that of funded large loan indicating loans are being increasingly concentrated to big borrowers.
He said the banks' tendency to extend non-funded facilities to their customers since 2009 onward has become a major concern for the banks and regulators as these loans become funded liabilities of banks with push in NPL. Moreover in 2011, 2012 and 2013 large loans were regionally and geographically concentrated.
In his speech, Abul Quasem said it is a matter of concern that 55 per cent of the total loans are in the hands of about 1800 people. Credit should not be concentrated in Chittagong rather it should go to every people and each area of the country.
He criticized the businesses and entrepreneurs' practice of availing loan facilities from banks on trust by promising to repay it within 45 days and make it one or two years of rescheduled loans by banks.
 "It is a concern of Bangladesh Bank that there are critical loans in Chittagong which is about Tk 120 to Tk 180 billion. Shipbuilding industry has become a risky industry as many of the borrowers have already become bankrupt," he observed.
Mr Quasem cautioned the banks to be very careful in providing large loans in shipbuilding sector.
He said right at the moment banking sector has been facing a sluggish investment and concentration of loans is very risky, specially the large loans. If the amount of loans at risk stands at 18 per cent of the total loans, it may rise to 25 per cent in short period of time, he added.   
National Credit and Commerce (NCC) bank managing director Golam Rafiz Khan said the bankers must keep in mind the custodian role of protecting depositors' money.
At present, about Tk 500 billion loans is at risk which is declared officially. The amount may be even higher, he added.
He said although entrepreneurs are adding value to economy time has come to bring discipline and address the mishaps. Both bankers and borrowers should come to a shared approach to solve any problem.