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Thirteen banks were holding more than half of the defaulted loans in the country’s banking sector as of September 2021 as the banks mostly failed to attain any significant progress in recovering loans from the defaulters.
The banks were holding more than 10 per cent defaulted loans each against their outstanding loans with some of them having with defaulted loans above 50 per cent.
Bangladesh Bank data showed that the amount of defaulted loans held by the 13 banks increased by Tk 2,475.87 crore to Tk 57,416.21 crore as of September 30, 2021 compared with Tk 54,940.34 crore a year ago.
The NPL in the 13 banks represents 56.76 per cent of the total Tk 1,01,150.3 crore in defaulted loans of all banks in the country.
There are 60 banks operating in the country.
The 13 banks are Janata Bank, Sonali Bank, Agrani Bank, BASIC Bank, AB Bank, Rupali Bank, Padma Bank, National Bank of Pakistan, Rajshahi Krishi Unnayan Bank, Bangladesh Commerce Bank, ICB Islami Bank, Bangladesh Development Bank and Habib Bank.
Scams and irregularities in issuing loans were the major reasons for the high NPL in most of the banks, BB officials said.
Though the central bank and the Anti-Corruption Commission have identified a number of people responsible for the scams and irregularities, no major steps are yet to be taken against them to prevent the soaring of NPL, they said.
Instead the government has been adopting policies to sweep the default loan problem under the carpet by the way of issuing policy supports to the loan defaulters, they said.
In terms of value, the amount of default loans in scam-hit Janata Bank, a state-owned commercial bank, was the highest, Tk 13,837.17 crore, representing 21.9 per cent of the bank’s total outstanding loans.
Janata Bank’s issuance of credit of around Tk 9,000 crore between 2009 and 2014 to two groups of companies, AnonTex and Crescent Group, largely turned defaulted.
Due to the fragile financial state, Janata Bank also suffered the highest amount of provision shortfall of Tk 5,313.18 crore at the end of September.
Sonali Bank, another state-owned commercial bank, suffered the second highest, Tk 10,293.85 crore, in defaulted loans with the ratio of NPL reaching 17.56 per cent of its outstanding loans.
The Hallmark Group swindled Tk 3,546 crore from the then Ruposhi Bangla Hotel branch of Sonali Bank between 2010 and 2012.
The ACC has so far filed in this connection around 50 cases, including cases against Hallmark Group managing director Tanvir Mahamud and former Sonali Bank managing director Humayun Kabir.
Agrani Bank, another SCB, held the third highest amount of defaulted loans, Tk 7,871.83 crore, representing 12.91 per cent of its outstanding loans.
State-owned BASIC Bank’s defaulted loans stood at Tk 7,619.26 crore at the end of September, representing 51.73 per cent of the bank’s outstanding loans. BASIC Bank’s defaulted loan was the highest among the SCBs in terms of ratio.
Massive irregularities in sanctioning loans took place in the bank between 2009 and 2012 when Sheikh Abdul Hye Bacchu was chairman of the bank.
The BB found the involvement of Sheikh Abdul Hye Bacchu in extension of shady loans which became bad loans within a few years to make the bank almost bankrupt.
Asked about the recovery of defaulted loans, BASIC Bank managing director Anisur Rahman told New Age that the bank’s recovery from the defaulters would be better in 2021 compared with the recovery in the previous year.
‘We would get a complete picture of the recovery at the end of the year,’ he said.
The amount of defaulted loans stood at Tk 5,333.24 crore or 16.84 per cent of outstanding loans in AB Bank, Tk 3,834.35 crore or 11.09 per cent of outstanding loans in Rupali Bank, Tk 3,585.88 crore or 59.01 per cent of outstanding loans in Padma Bank, Tk 1,358.87 crore or 97.68 per cent of outstanding loans in NBP, Tk 1,211.88 crore or 15.69 per cent of outstanding loans in RAKUB, Tk 1,205.9 crore or 50.24 per cent of outstanding loans in BCBL, Tk 664.4 crore or 78.26 per cent of outstanding loans in ICB Islami Bank, Tk 559.92 crore or 25.23 per cent of outstanding loans in BDBL and Tk 39.66 crore or 19.74 per cent of outstanding loans in Habib Bank.
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