Mohammed Badrul Ahsan :
The central bank has recently warned nine new generation banks for their higher default loans that made the central bank concerned, sources said.
The warning came at a meeting Bangladesh Bank held recently with the top managers of those banks at its headquarters.
In the meeting, Managing Directors of the banks were asked to bring down their default loans at a tolerable rate by next month (December).
The banks are Meghna, Midland, Modhumoti, NRB, NRBC, NRBG, SBAC, The Farmers and Union Banks.
A senior executive of Bangladesh Bank (BB) said the new banks are taking low quality loans from other banks and lending aggressively without assessing their client’s need.
He added that some new banks were found approving loans without complying with loan procedure fully.
Bangladesh Bank asked top managers to disburse loan after being fully compliant with loan procedure.
The central bank data showed that classified loans of new banks have increased five to seven times in nine months which raised serious concern to the authority.
The Farmers Bank which was already found involved with loan irregularities saw the most higher default loan rate among the new banks.
The default loan rate of the bank jumped to 7.24 percent in September this year from 0.36 percent in December last year, according to the central bank data.
The total default amount stood at Tk277 crore in September, of which Tk124 crore turned into bad and loss loan. The bad amount is presumed to not be recoverable.
The bank was penalised Tk10 lakh by Bangladesh Bank at the beginning of this year for violating rule in disbursing loans to some institutions. Later, the bank filed a writ with the High Court against the penalty which drew a huge criticism from every corner.
The advance-deposit ratio of The Farmers bank was 87.35 percent as of June this year beyond the authorised limit of 85 percent.
The credit growth of the bank was 37 percent as of June this year, the highest among the private banks, according to the central bank.
Among the other new banks, four were in zero default loans in December last year and incurred significant default loans in nine months.
The four banks are Meghna, Modhumoti, SBAC and Union Bank.
The default loan rate of Meghna bank climbed up to 3.01 percent in September this year from zero in December last year followed by Modhumoti 0.45 percent, SBAC 0.08 percent and Union 0.04 percent, according to the central bank data.
The three banks for nonresidents performed worst in nine months, gaining higher default loans. The default loan rate of NRB Bank rose to 2.27 percent in September this year from 0.20 percent in December last year followed by NRBC to 4.19 percent from 0.26 percent and NRBG to 1.14 percent from 0.64 percent, showed the central bank default loan statement.
The new banks also have been asked to appoint required independent director to their board at the coming annual general meeting.
Most of the new banks missed the deadline of appointing independent director by July 22 this year.
“We have been asked to pursue the board to appoint required number of independent directors soon as per the amended bank company act 2013,” said Nurul Amin, managing director of Meghna Bank.
He said only some two or three banks have appointed independent directors. The post remained vacant in most of the new banks still after the deadline over.
