Economic Reporter :
Ministry of Finance is planning to provide the state guarantee of Tk700 crore to the Rajshahi Krishi Unnayan Bank (Rakub) as low-cost credit to prop up the specialised bank reeling under the negative effects of a small capital base and liquidity crisis, said a senior finance ministry official
He said it is not possible for the state-owned bank to survive in the competitive market without the state guarantee for the next two years.
The move has been taken as the bank failed to repay the loan of Bangladesh Bank in due time. For failure to repay loan, the central bank cut the bank’s Tk471.35 crore profit during the 2009-12 period.
Finance ministry has agreed to give the guarantee, according to a summary signed by finance secretary. It’s now waiting for the approval of Finance Minister AMA Muhith.
According to the summary, Rakub will repay its all loan to the government institutions and Bangladesh Bank as per the condition.
The guarantee will remain effective until June 30, 2017. Rakub will provide classified loan and repayment will be in instalment within the duration of the guarantee.
The financial health of the Rakub is still weak despite making a profit of Tk3.36 crore in fiscal year 2014-15.
The operational cost of Rakub is quit high which indicates inefficient management of the bank.
Ministry of Finance is planning to provide the state guarantee of Tk700 crore to the Rajshahi Krishi Unnayan Bank (Rakub) as low-cost credit to prop up the specialised bank reeling under the negative effects of a small capital base and liquidity crisis, said a senior finance ministry official
He said it is not possible for the state-owned bank to survive in the competitive market without the state guarantee for the next two years.
The move has been taken as the bank failed to repay the loan of Bangladesh Bank in due time. For failure to repay loan, the central bank cut the bank’s Tk471.35 crore profit during the 2009-12 period.
Finance ministry has agreed to give the guarantee, according to a summary signed by finance secretary. It’s now waiting for the approval of Finance Minister AMA Muhith.
According to the summary, Rakub will repay its all loan to the government institutions and Bangladesh Bank as per the condition.
The guarantee will remain effective until June 30, 2017. Rakub will provide classified loan and repayment will be in instalment within the duration of the guarantee.
The financial health of the Rakub is still weak despite making a profit of Tk3.36 crore in fiscal year 2014-15.
The operational cost of Rakub is quit high which indicates inefficient management of the bank.
