Six banks in deep trouble with defaulted loan

Six public and private banks are plagued with defaulted loans. Condition of the state-owned Basic Bank is very fragile with half of the disbursed loans got defaulted. The bank has not been improving for a long time. Condition of ICB Islamic Bank is even worse. About 79 percent of the bank's loans have already been defaulted.

The fate of the former Farmers Bank remains the same as the number of defaulters have exceeded 60 percent. Besides, 25 to 43 percent of the loans disbursed by Bangladesh Commerce Bank, BDBL and Rajshahi Krishi Unnayan Bank have been defaulted. This information has come up in the analysis of the updated report of Bangladesh Bank.

Banking experts said that some banks in the financial sector have been in a hole for a long time. Basic Bank in particular has been heavily looted. The looting took place while Sheikh Abdul Hai Bachchu was the Chairman. But no one involved with the scam has been brought to justice. According to them, it would have been better to merge Basic Bank with another bank besides bringing the culprits to the book thereby creating a precedent.

Former Governor of Bangladesh Bank Salehuddin Ahmed said that the problem of these banks is long standing. If you nurture it, the burden will increase.

He said If possible, it would be better to merge these banks with another bank. At the same time, those involved in irregularities and corruption centered on the defaulters should be brought under punishment. Otherwise, others will be encouraged to commit the same crime he pointed out.

In this regard, senior banker Shafiqur Rahman said that the former management and the board are responsible for today's fate of these banks. Even then, a part of those who have been given responsibilities at different times are amateurs, he said.

"For these reasons, the banks could not turn around anymore but the defaulted loans are increasing year after year or they are fixed on high defaulters" he said.

He thinks that it is possible to make the banks better even today if there is goodwill of all the parties.

According to the updated report of Bangladesh Bank, at the end of 2020, the state-owned Basic Bank has a debt balance of Tk 14,673 crore. Of this, Tk 7,500 crore has been defaulted which is 51.13 percent of the disbursed loans. The amount of uncollectible default amount is Tk 8,304 crore, which is 49.8% of the total defaulted loan. Not only that, the bank also has a deficit of Tk 3,288 crore in security reserves or provisions.

According to the report, ICB Islamic Bank has a debt balance of Tk 856.23 crore. Of this, Tk 671.27 crore has been defaulted till December, which is 8.40 percent of the disbursed loans.

The amount of uncollectible default amount is Tk 80 crore, which is 8.14 percent of the total defaulted loan. The same scenario prevails with Bangladesh Commerce Bank. Till last December, the bank had disbursed a loan of Tk 2,275 crore. Of this, Tk 977 crore has been defaulted, which is 43.14 percent of the disbursed loans. Of this, amount of uncollectible default amount is Tk 904 crore, which is 39.92 percent of the total defaulted loan. The bank also has a deficit of Tk 509.15 crore in security reserves or provisions.

According to the report, the debt balance of Bangladesh Development Bank Limited (BDBL) was Tk 1,656 crore till December of the outgoing year. Of this, the defaulted amount is Tk 595 crore, which is 33.8% of the loan disbursement. Out of 31.35 percent of the total defaulted loans, the amount of uncollectible default amount is Tk 551 crore. With Rajshahi Krishi Unnayan Bank till December, the bank has disbursed loans of Tk 6,017 crore. Of this, the defaulter is Tk 1,517.21 crore, which is 25.19 percent of the disbursed loan. The uncollectible default amount stands over a thousand crore taka, which is 17.23 percent of the total defaulted loans.

Meanwhile, Padma Bank is counting the cost of the Farmers Bank scandal. According to the updated report of Bangladesh Bank, at the end of December 2020, the loan balance of Padma Bank stood at Tk 5,608 crore. Of this, the defaulter is Tk 3,455 crore, which is 61.60 percent of the disbursed loan. However, the current management claims that Padma Bank is doing better than before. Efforts to recover defaulted loans continue.

When asked, Padma Bank Managing Director (MD) Ehsan Khasru said, "It has been possible to identify where and to whom the money has gone."

Now I am trying to realize. In the last two years, Tk 242 crore has been collected in cash. Besides, Tk 1,244 crore was rescheduled” said Khasru.

"Before, I could not return the money to the depositors but now I can," he said.

Due to these efforts, people's confidence has also returned a bit. He hopes that the bank will gradually recover.

ask/wi