SoBs failed to recover
stuck up default loans

Staff Correspondent: The state-owned banks (SoBs) have not been able to achieve their target of recovering defaulted loans. Stay away from achieving the real target set, the revised target is not showing any success in performing. In the first six months of the current fiscal year 2021-2022, six state-owned commercial banks have been able to recover about 51 per cent of the overall revised annual defaulted loans. This rate is 47 percent less compared to the original target.
According to sources, Rupali, Agrani and Sonali among the six banks have recovered slightly more than the half-yearly target. On the other hand, Janata, BASIC and BDBL have failed to achieve the half-yearly target.
Under the ‘Annual Performance Agreement (APA)’ executed with the Financial Institutions Department, the main target for recovery of defaulted loans of six state-owned commercial banks in the current fiscal year 2021-2022 was Tk 1,605 crore. But due to unsatisfactory recovery of defaulted loans, the target of defaulting loans of Agrani, Rupali and Basic Bank was reduced to Tk 135 crore last November. As a result, the revised annual target for recovery of defaulted loans of six banks stands at Tk 1,460 crore.
According to the source, in the first six months of the financial year (July-December 2021), the banks have recovered Tk 752.96 crore against this target. This is 51.22 percent of the revised annual target and about 47 percent less of the original target. With the exception of Sonali Bank and BDBL, the amount and rate of non-performing loans of the remaining four banks in the current financial year has increased as compared to the previous fiscal year 2020-2021.
Sonali Bank
According to the statistics, Sonali Bank has an annual target of Tk 450 crore for the recovery of defaulted loans in the current financial year. In contrast, the bank has collected Tk 238 crore in the first six months of the financial year. The recovery rate is 52.44 percent. During the same period of the last fiscal year 2020-2021, the amount of defaulted loan of Sonali Bank was Tk 263.22 crore (recovery rate was 56 percent). As such, the amount and rate of non-performing loan collection of Sonali Bank has decreased in the current financial year as compared to the previous financial year.
Janata Bank
Janata Bank’s annual target for recovery of defaulted loans is Tk 450 crore. On the other hand, it has collected Tk 163.72 crore. This is 40.75 percent of the annual target. In the same period of last financial year, the amount of defaulted loan of Janata Bank was Tk 104.46 crore (recovery rate was 23 percent).
Agrani Bank
Under the APA’s original agreement, Agrani Bank had an annual target of Tk 400 crore for non-performing loans. In the revised agreement, the target has been reduced to Tk 360 crore. In contrast, the bank has collected Tk 219 crore in six months. The collection rate is 60.83 percent (according to the original target, the collection rate is 54.75 percent). During the same period of the last financial year, the defaulted loan collection of Agrani Bank was Tk 131 crore (recovery rate was 33 percent).
Rupali Bank
According to the original APA agreement, Rupali Bank had set an annual recovery target of Tk 140 crore for non-performing loans. In the revised agreement, the target has been reduced to Tk 80 crore. In contrast, the bank has collected Tk 84.39 crore in six months. The recovery rate is about 92 percent (47 percent according to the original target). During the same period of the last financial year 2020-2021, the amount of defaulted loan of Rupali Bank was Tk 39.6 crore (recovery rate was 28 percent).
BASIC Bank
Similarly, the annual target for recovery of defaulted loans of Basic Bank was Tk 125 crore. In the revised agreement, the target has been reduced to Tk 100 crore. In contrast, the bank has collected Tk 36.94 crore in six months. The recovery rate is about 36 percent (29.55 percent according to the original target). During the same period of the last fiscal year 2020-2021, the amount of defaulted loan of Basic Bank was Tk 26.71 (recovery rate was 23 percent).
BDBL
BDBL’s annual target for recovery of defaulted loans is Tk 40 crore. In contrast, the bank has collected Tk 12.69 crore in six months. The recovery rate is 33 percent. During the same period of the last fiscal year 2020-2021, the amount of defaulted debt of BDBL was Tk 16.10 (recovery rate was 43 percent). As such, the amount and rate of non-performing loans of BDBL Bank has decreased in the current financial year as compared to the previous financial year.
An official of the Financial Institutions Department said, “Banks have not been able to recover their defaulted loans as per the target due to non-compliance.” Now that the corona is declining, the collection of defaulted loans will increase in the remaining six months of the financial year. ‘