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Bank & Finance - 4 days ago

Default loan of SoBs increased abnormally

Tk 6,805 cr defaulted in 3-month

Mahfuz Emran: The amount of non-performing loans of state-owned commercial banks has increased further. Last January-March; In three months, the defaulted loans of banks in this sector have increased by about Tk 6,805 crores. And more than Tk 25 thousand crore have increased in the last one year. Among state-owned banks, Janata Bank and Agrani Bank have the highest number of defaulted loans. About 60 percent of the total defaulted loans in these two banks. Overall, these two banks are responsible for the increase in defaulted loans of banks in this sector. The increase in defaulted loans in these two banks within one year is comparatively less in other banks. This information is known from the audited financial statements of the banks and Bangladesh Bank sources.
Sector stakeholders said that most of the defaulted loans of state-owned banks were taken by people close to politically influential people. So, these debts are not being collected. Therefore, the defaulted loans of these banks are increasing day by day. Government assistance is needed to recover these debts. Without political will, state-owned banks will not be freed from bad loans. If banks give loans for political reasons, defaults will continue to increase in the future.
According to the data, the amount of defaulted loans of state-owned banks has increased to Tk 85,870 crores till March this year, which is 8.60 percent more than three months ago. Three months ago, the defaulted loans of state-owned banks were Tk 79,650 crore. Tk 6,805 crores increased in three months. And at the end of March 2023, the defaulted loans of state-owned banks were Tk 60,642 crores. In other words, defaulted loans have increased by Tk 25,228 crores within one year.
Analysis of the data shows that the defaulted loans of Sonali, Janata, Rupali and Basic Bank have increased in the last three months. At this time, the defaulted loans of Agrani and BDBL have decreased. However, in the space of one year, the non-performing loans of all five banks except Bangladesh Development Bank have increased.
Janata and Agrani Bank are at the top of defaulted loans of state-owned banks. These two banks account for 60 percent of the total defaulted loans of the banks in this sector. According to the data, Janata Bank’s defaulted loans have increased to Tk 30,495 crores till March this year; Which is 31 percent of the total loan. Three months ago i.e. up to December last year, the amount of defaulted loans was Tk 25,009 crores. In three months defaulted loans increased by Tk 5,486 crores. And in March last year, the default was Tk 15,005 crores. In other words, Janata Bank’s defaulted loans have increased by Tk 15,490 crore within a year.
Managing Director of Janata Bank Abdul Jabbar did not answer over phone.
Second placed Agrani Bank’s non-performing loans declined marginally till March this year. At the end of March, the bank’s non-performing loans stood at Tk 20,864 crore, which is 28 percent of total loans. It was Tk 21,476 crore till December last year. In three months, defaults have decreased by Tk 612 crore. However, the defaulted loans increased by Tk 6,058 crores during the year. As of March last year, the defaulted loan status was Tk 14,806 crore.
Agrani Bank Managing Director Murshedul Kabir was contacted to inquire about the same, but he did not answer the phone.
Meanwhile, state-owned Sonali Bank’s defaulted loans have increased to Tk 14,988 crores till March this year, which is 14.84 percent of the total loans. In December last year which was Tk 13,340 crores. And in March last year it was Tk 12,067 crores. That is, defaulted loans in three months Tk 1,340 crores and increased by Tk 2,921 crores in a year.
At the end of March this year, Rupali Bank’s defaulted loans increased to Tk 10,357 crores, which is 21 percent of the total loans. At the end of last December, it was Tk 10,043 crores. And at the end of March last year, it was Tk 10,227 crores. The bank’s defaulted loans increased by Tk 314 crore in three months and Tk 130 crore in one year.
Besides, the defaulted loans of Basic Bank, which is in crisis, increased to Tk 8,292 crores at the end of March, which is 63 percent of the total loans. Until last December, defaulted loans were Tk 8,204 crores. And till March last year it was Tk 7,475 crores. That is, defaulted loans increased by Tk 88 crores in three months and Tk 817 crores in one year.
At the end of March this year, BDBL’s defaulted loans have reduced to Tk 894 crore. At the end of last December, it was Tk 993 crore. And at the end of March last year, it was Tk 1,063 crores. BDBL’s defaults fell by Tk 119 crore in the three months and Tk 189 crore in the year.
The former governor of Bangladesh Bank Salehuddin Ahmed said, “If the government has the will and if Bangladesh Bank takes a strong stand, then it is possible to reduce defaulted loans. If the Bangladesh Bank tells the state-owned banks, if they fail to collect the defaulted loans, all facilities will be stopped as the performance will be negative. Only then the collection of defaulted loans will increase several times. But Bangladesh Bank does not see any such action. On the contrary, the debtors are being given the opportunity to give more concessions, extend the time, rescheduling on easy terms.

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