Staff Correspondent: Interest income is the main source of profit for banks. Apart from this, the bank earns in various ways including service charge, LC commission. Seven public and private banks earn more than their expenses from interest. Mainly due to high defaults, interest is being calculated against the entire deposit even though income cannot be shown against significant loans. Banks are taking deposits at high interest rates to meet daily expenses.
Those concerned said that the bank cannot show income against defaulted loans. And when a bank goes bad, many people withdraw their deposits. No one wants to keep new money. That is why bad banks offer high interest rates to attract depositors. Banks involved in various frauds including loans have more defaults. Loans taken out anonymously or given on commission are not recovered in most cases. According to the rules of the central bank, last October a bank was able to distribute loans at a maximum interest rate of 10.93 percent. But some banks have taken interest deposits from 12 to 13.43 percent. Basically, the banks are meeting various daily expenses including salary of officers and employees, office rent, utility bills with the money taken in this way.
Banks with higher average interest on loans than average interest on deposits are state-owned BASIC and BDBL and private sector banks Padma, ICB Islamic, National, Bangladesh Commerce and Foreign National Bank of Pakistan. Among these banks, National Bank and BDBL were profitable during the same period last year. These banks have come under discussion at different times due to various frauds.
According to the data of Bangladesh Bank, last September, the state-owned Basic Bank took deposits at an average of 6.22 percent interest. The average loan interest rate in the same month was 2.64 percent. This resulted in an average loss of 2.58 percent. The bank’s loss against interest was 1.84 percent during the same period last year. Bangladesh Development Bank gave loans at an average of 5.41 percent interest against deposits at 6.47 percent interest. The loss of the bank stands at 1.06 percent. During the same period last year, the interest income of the bank was 0.42 percent.
Private sector National Bank posted a loss of 14 paise against Tk 100 in September. In September last year, the interest income of the bank was 0.42 percent. Padma Bank took deposits at an average interest of 7.97 percent, but the average interest on loans was 3.11 percent. The loss was 4.20 percent. ICB Islamic Bank takes deposits of 4.03 percent but the income from loans is 1.52 percent. Bangladesh Commerce Bank takes an average of 5.62 percent deposits but disburses loans at 4.21 percent. The loss is 60 paise. National Bank of Pakistan has 2.62 percent of deposits but the bank has no income.
According to the data of Bangladesh Bank, National Bank of Pakistan is at the top of the percentage of defaulted loans. As of last September, 98.18 percent of the bank’s Tk 1,380 crore loan is in default. 87 percent of ICB Islamic Bank’s Tk 791 crore loan is in default. Most of the irregular loans given to BASIC Bank while Abdul Hai Bachchu was chairman are not coming back. 64.55 percent of Basic Bank’s Tk 12,717 crore loan is defaulted.
About 64 percent of Padma Bank’s Tk 5,763 crore loan is now in default. 60.09 percent of Bangladesh Commerce defaulted on Tk 2,289 crore is defaulted. 44.22 percent of BDBL’s Tk 2,243 crore loan has defaulted. And against National Bank’s Tk 42,259 crore loan, 32 percent defaults have been shown till September. However, according to a Bangladesh Bank report, the bank has no income against 58 percent of its loans. However, these loans are being shown regularly in various ways, including a grace period of three to four years or not charging interest.
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