Rupali Bank at high loan default risk with 20 borrowers taking bulk of credit

Rupali Bank has lent as much as nearly half of Tk 107 billion loan to only 20 clients, prompting the central bank to warn that the state-owned bank is at increased risk of default.
According to a Bangladesh Bank report, 42 per cent of the bank's loan has been given to these 20 borrowers. Again, five businessmen altogether hold 22 per cent of that loan.
The central bank report, on the overall performance of Rupali Bank in 2013, says outstanding loans with the top 20 recipients amounted to Tk 45.077 billion out of the Tk 107.42 billion lent by the bank.
The bank has Tk 23.98 billion unpaid loans with five business groups, which is 22.33 per cent of the total loan disbursed.
Bangladesh Bank has cautioned Rupali Bank about these accumulated loans to a handful of clients being defaulted on and instructed it to strengthen its collection operations.
Only Tk 1.04 billion has been collected from these top 20 loan-recipients, both individual and business groups, as of Dec 31, 2013, according to the central bank report.
It says out of Rupali Bank's totals assets of Tk 204.54 billion, Tk 125.56 billion has been marked as risky assets.
Inefficient management and incompetent board of the bank had led to a major portion of the loan being disbursed to a handful of clients, says former Bangladesh Bank governor Salehuddin Ahmed.
Meanwhile, Bangladesh Bank has forwarded a summary of the report to the finance ministry's Bank and Financial Institutions Division, according to a news agency.