Badrul Ahsan :
The recapitalization funds could not bring changes to its default loan scenario in the state-owned commercial banks, Finance Ministry sources said.
They said that the fund could only improve the banks’ balance sheet.
In response to a recommendation by the International Monetary Fund (IMF), the government in FY2013-14 took step to rescue the State Bank’s allocating recapitalisation funds in the budget.
Accordingly, an amount of Tk 9,457.60 crore were disbursed from the five years budget allocations for recapitalisation.
Sonali Bank got the highest amount of recapitalisation fund from budget, BASIC was the second highest,
while Bangladesh Krishi Bank took recapitalisation fund every year since the FY2011-12.
Now, a total of Tk 2,000 crore were allocated in the revised budget of the current fiscal year. The financial condition of the state-run banks has gone down due to massive loan anomalies.
According to official data, the capital shortfall of the BASIC Bank declined by Tk 706 crore during last two fiscal years though the bank’s overall default loan situation has not improved.
BASIC Bank received Tk 2,390 crore from the budget allocation under the government recapitalisation programme.
According to a Finance Division working paper, the capital shortfall of the BASIC Bank is Tk 1,934.5 crore, while the capital reserve ratio was only 7:55 in 2015.
However, officials at the Finance Ministry said that the budget deficit would increase if they met the banks’ capital shortfalls from the public money and bonds.
BASIC Bank was not able to reduce the non-performing loans and its liquidity fund reached Tk 1,500 crore, official sources said.
The sources said that most of the funds were utilised to buy the government bonds.
The government disbursed Tk 9,457.60 crore during last five years since FY2011-12 for recapitalisation of state banks.
As per a summary of Finance Division observations, Sonali Bank received Tk 2,794.81 crore, BASIC Bank Tk 2,390 crore, Agrani Bank Tk 1,081 crore, Janata Bank Tk 814 crore, Rupali Bank Tk 272.5 crore, Bangladesh Krishi Bank Tk 789.77 crore and Rajshahi Krishi Unnayan Bank Tk 318 crore.
The total default loan of Sonali and BASIC banks is 28 percent of total amount in the country’s banking sector.
However, money market experts held political influence in loan sanction and its recovery activities responsible for failure.
“State-owned banks have expert manpower, but these people cannot work due to political interference,” said AB Mirza Azijul Islam, former Advisor to the Care Taker Government.
“As long as the banks will not be able to take independent decision, the scenario will not be changed, will be rather worsening gradually,” he cautioned.
The recapitalization funds could not bring changes to its default loan scenario in the state-owned commercial banks, Finance Ministry sources said.
They said that the fund could only improve the banks’ balance sheet.
In response to a recommendation by the International Monetary Fund (IMF), the government in FY2013-14 took step to rescue the State Bank’s allocating recapitalisation funds in the budget.
Accordingly, an amount of Tk 9,457.60 crore were disbursed from the five years budget allocations for recapitalisation.
Sonali Bank got the highest amount of recapitalisation fund from budget, BASIC was the second highest,
while Bangladesh Krishi Bank took recapitalisation fund every year since the FY2011-12.
Now, a total of Tk 2,000 crore were allocated in the revised budget of the current fiscal year. The financial condition of the state-run banks has gone down due to massive loan anomalies.
According to official data, the capital shortfall of the BASIC Bank declined by Tk 706 crore during last two fiscal years though the bank’s overall default loan situation has not improved.
BASIC Bank received Tk 2,390 crore from the budget allocation under the government recapitalisation programme.
According to a Finance Division working paper, the capital shortfall of the BASIC Bank is Tk 1,934.5 crore, while the capital reserve ratio was only 7:55 in 2015.
However, officials at the Finance Ministry said that the budget deficit would increase if they met the banks’ capital shortfalls from the public money and bonds.
BASIC Bank was not able to reduce the non-performing loans and its liquidity fund reached Tk 1,500 crore, official sources said.
The sources said that most of the funds were utilised to buy the government bonds.
The government disbursed Tk 9,457.60 crore during last five years since FY2011-12 for recapitalisation of state banks.
As per a summary of Finance Division observations, Sonali Bank received Tk 2,794.81 crore, BASIC Bank Tk 2,390 crore, Agrani Bank Tk 1,081 crore, Janata Bank Tk 814 crore, Rupali Bank Tk 272.5 crore, Bangladesh Krishi Bank Tk 789.77 crore and Rajshahi Krishi Unnayan Bank Tk 318 crore.
The total default loan of Sonali and BASIC banks is 28 percent of total amount in the country’s banking sector.
However, money market experts held political influence in loan sanction and its recovery activities responsible for failure.
“State-owned banks have expert manpower, but these people cannot work due to political interference,” said AB Mirza Azijul Islam, former Advisor to the Care Taker Government.
“As long as the banks will not be able to take independent decision, the scenario will not be changed, will be rather worsening gradually,” he cautioned.
