Staff Reporter :
Bangladesh Bank (BB) warned four state-owned commercial banks (SCBs) for violating its lending rules to a single borrower, sources said.
The four SCBs — Sonali, Janata, Agrani and Rupali – have reportedly disbursed loans to their 10 big clients in violation of BB’s rules regarding the single borrowers’ exposure limit.
BB issued the warning at a meeting between the SCBs and the BB held at the central bank headquarters in the capital on Monday.
BB governor Dr Atiur Rahman presided over the meeting. Managing Directors and Chief Executive Officers of the four banks also attended it.
According to Bank Company Act-1991, the outstanding amount of loan to a single person, counterparty or a group will not exceed 15 per cent of the capital of a bank at any point of time.
But the SCBs have reportedly disbursed loans to the single borrowers at 30 to 40 per cent of the size of their capital, meeting sources said.
They said, the authorities of the central bank also asked the SCBs to take immediate steps to bring down the loans of single borrowers within the tolerable level, speed up their recovery of defaulted loans, improve internal control and complete their automation process as soon as possible.
BB also expressed concern over the rising classified loans of the banks. The issue of disbursing fresh loans to defaulters was also discussed at the meeting and the central bank warned of punitive action against the banks if they further disburse loans to defaulters.
The central bank also took the SCBs to task as they failed to recover outstanding loans from the top 20 defaulters.
The SCBs had recovered only Tk 238 crore from their top 20 loan defaulters last year against the target of Tk 623 crore.
“We have asked the SCBs to bring down their single borrower exposure limit within shortest possible time. They must do it, otherwise, their financial health could be deteriorated if the borrowers face financial troubles,” SK Sur Chowdhury told The New Nation on Tuesday.
The non-performing loans badly affect the working capital, BB reminded it to the top bosses of the banks.
“We have also asked the SCBs to introduce automation system at all their branches as they are lagging far behind from private and foreign banks in introducing online banking for customers,” he added.
The central bank earlier set a deadline for the SCBs to introduce automation at all their branches by 2016.
The meeting also reviewed the performance of the SCBs in light of the Memorandum of Understanding (MoU) earlier signed with the central bank.
