Bangladesh Bank (BB) has opened talks with the managing directors and the chief financial officers of 10 banks to try to finalise deals to save them from collapsing, reports UNB.
The move got underway after the central bank's inspection found severe irregularities, huge default loans, liquidity shortage, mismanagement and distortion of funds. The central bank inspectors in their report alerted the authorities about the collapsing banks.
BB's new governor Abdur Rouf Talukder has initiated save-the-banks move in the greater interest of domestic economy, sources said. A deputy governor has been tasked to complete deals with the banks for 3-5 years.
The discussions were being held in line with the central bank's policy, said BB officials. After the discussion the BB would sign separate memorandums of understanding (MoUs) with these banks.
The BB will keep these banks under direct monitoring with an action-based plan and giving an interim time to come out of the crisis.
The central bank identified the weak banks on the basis of four indicators -- level of non-performing loans, capital adequacy, loan-to-deposit ratio, and provisioning. The progress of each bank will be monitored by a senior official of BB as per the agreements'.
Earlier, the BB signed MoUs with state-owned Sonali, Agrani, Janata, Rupali, BASIC, Specialized Bangladesh Agricultural Bank (BKB), and Rajshahi Agricultural Development Bank (RAKAB).
Despite this, the condition of the banks is not improving as expected. In such a situation, new agreements are being made with 10 more banks.
© 2023 - All Rights with The Financial Express