BB bolsters classified loan recovery drive

The central bank moved to ask the commercial banks to  take all-out measures to reduce the increasing volume of classified loans by the end of this calendar year through a vigorous recovery drives across the country.
A decision to this end was taken at a meeting of the senior officials of the Bangladesh Bank at its headquarters in Dhaka Wednesday with BB Governor Atiur Rahman in the chair.
"We've already taken different supervisory measures to improve the overall financial health of the country's banking sector further through strengthening recovery drives," the central bank chief told the FE after the meeting.
Dr. Rahman also said senior officials of the central bank have already sat with top executives of three to four commercial banks separately for invigorating their drives to make the borrowers repay the money.
"We're working hard to bring down the non-performing loans (NPLs) to a reasonable level from the existing position," the BB governor noted.
The central bank's latest moves came against the backdrop of snowballing of the NPLs during the July-September period of the ongoing calendar year as a portion of rescheduled loans turned classified in the meantime.
The volume of classified loans increased by 11.58 per cent to Tk 572.91 billion in the third quarter (Q3) of 2014 from Tk 513.44 billion in previous quarter of this calendar year. It was Tk 481.72 billion in the Q1.
During the Q3, the share of NPLs in the total outstanding loans from the banking system rose to 11.60 per cent from 10.75 per cent in the previous quarter. It was 10.45 per cent in the January-March period.
Talking to the FE, a senior BB official said the central bank will meet top executives of another five commercial banks, having increased amounts of NPL, by the end of next week.
"Actually, we want to reduce the volume of NPLs by the end of December this year through strengthening our supervision and monitoring from headquarters to regional level," the central banker explained.
He also said the banks must realise the recoverable loans. "The issue will be discussed at the next bankers' meet, scheduled to be held shortly."
A portion of rescheduled loans has already turned into NPLs as the borrowers have failed to keep their commitments to meet the loan-rescheduling criteria, set by the BB earlier, the bankers said.
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