Staff Reporter :
Four state-owned banks-Sonali, Janata, Agrani and Basic-have altogether restructured and rescheduled Tk14,061 crore as loans to borrowers last year in the wake of rising default loans in their overall credit portfolios, officials said.
They said these banks went for an indiscriminate loan rescheduling as a result of poor loan recovery from the defaulted borrowers pushing them into deep financial crisis.
“Banks made indiscriminate loan rescheduling and write-offs to reduce rising default and non-performing loans and this practice is harming their long-term financial stability,” Dr Salehuddin Ahmed, former Bangladesh Bank (BB) Governor, told The New Nation on Friday.
He said, these state-owned banks sanctioned loans to many errant companies and this is why they failed to recover the loans and added to their overall amount of loans in default.
“As they failed to recover loans, they have to rely on restructuring and rescheduling to reduce their high exposure of default loans,” he said.
Referring to a data of BB, he said, the default loans have further widened in the three state-owned banks last year, crippling their lending ability to new businesses.
“These banks witnessed a rise in default loans mainly due to poor loan recovery from big businesses and corporate groups,” Dr Salehuddin Ahmed said.
Terming repeated loan rescheduling a ‘pervasive incentive’ for willful defaulters, the former BB governor, said that they should not be allowed such facility year after year because such a culture will encourage good borrowers to do the same practice.
“Banks should take tough stance to recover loans from the errant borrowers. Efforts should be made through discussion and litigation in courts,” he said.
According to an official figure, Janata Bank rescheduled and restructured Tk 5,261 crore defaulted loans in 2015, followed by Sonali Bank Tk4,000 crore, Agrani Tk 2,800 crore and Basic Bank Tk 2,000 crore.
“Poor loan recovery forced banks to reschedule loans of defaulted borrowers last year,” a senior Sonali Bank official, told The New Nation on Friday.
He said, the bank recovered Tk 4,500 crore loans from various defaulted clients to reduce defaulted loan of the bank to Tk 2726 crore in 2015.
Earlier, the central bank offered a relaxed loan rescheduling policy for the commercial banks yielding to pressure from the business community.
Availing the facility, a total of 11 business houses in 2015 have rescheduled their Tk 15,218 crore defaulted loans owed to various banks. Prior to this, an amount of Tk 25,000 crore defaulted loans of various business houses have been restructured excusing political unrest of the country.
Four state-owned banks-Sonali, Janata, Agrani and Basic-have altogether restructured and rescheduled Tk14,061 crore as loans to borrowers last year in the wake of rising default loans in their overall credit portfolios, officials said.
They said these banks went for an indiscriminate loan rescheduling as a result of poor loan recovery from the defaulted borrowers pushing them into deep financial crisis.
“Banks made indiscriminate loan rescheduling and write-offs to reduce rising default and non-performing loans and this practice is harming their long-term financial stability,” Dr Salehuddin Ahmed, former Bangladesh Bank (BB) Governor, told The New Nation on Friday.
He said, these state-owned banks sanctioned loans to many errant companies and this is why they failed to recover the loans and added to their overall amount of loans in default.
“As they failed to recover loans, they have to rely on restructuring and rescheduling to reduce their high exposure of default loans,” he said.
Referring to a data of BB, he said, the default loans have further widened in the three state-owned banks last year, crippling their lending ability to new businesses.
“These banks witnessed a rise in default loans mainly due to poor loan recovery from big businesses and corporate groups,” Dr Salehuddin Ahmed said.
Terming repeated loan rescheduling a ‘pervasive incentive’ for willful defaulters, the former BB governor, said that they should not be allowed such facility year after year because such a culture will encourage good borrowers to do the same practice.
“Banks should take tough stance to recover loans from the errant borrowers. Efforts should be made through discussion and litigation in courts,” he said.
According to an official figure, Janata Bank rescheduled and restructured Tk 5,261 crore defaulted loans in 2015, followed by Sonali Bank Tk4,000 crore, Agrani Tk 2,800 crore and Basic Bank Tk 2,000 crore.
“Poor loan recovery forced banks to reschedule loans of defaulted borrowers last year,” a senior Sonali Bank official, told The New Nation on Friday.
He said, the bank recovered Tk 4,500 crore loans from various defaulted clients to reduce defaulted loan of the bank to Tk 2726 crore in 2015.
Earlier, the central bank offered a relaxed loan rescheduling policy for the commercial banks yielding to pressure from the business community.
Availing the facility, a total of 11 business houses in 2015 have rescheduled their Tk 15,218 crore defaulted loans owed to various banks. Prior to this, an amount of Tk 25,000 crore defaulted loans of various business houses have been restructured excusing political unrest of the country.
