38 banks warned for failing to report on Tk100cr default loans

The Bangladesh Bank on Monday warned 38 banks for failing to report on the borrowers' accounts with Tk100 crore and above default loans. 

In letters sent to these banks, the Banking Regulations and Policy Department of the central bank ordered them to submit the report within next Thursday. 

If a bank has no account with bad loans of Tk100 crore and above, it still has to submit the report mentioning zero number of such accounts in its statement, reads the letter.

And for further reporting those banks have to be cautious, warned the central bank.

On July 22, 2019, the Banking Regulations and Policy Department had issued a circular asking all banks to monitor accounts with Tk100 crore and above defaulted loans and send statements to the central bank on a quarterly basis.

The Bangladesh Bank also asked the banks to form a special monitoring cell for properly monitoring those accounts. 

But five state-owned banks, four foreign banks and 29 private banks did not follow the central bank's instruction properly and did not send any report to the central bank as guided by the circular, said an official of the Bangladesh Bank. 

When the increasing trend of defaulted loan in the country's banking sector was widely discussed last year, the central bank took various measures to rein it in. At that time, the newly appointed Finance Minister AHM Mustafa Kamal had declared that defaulted loan will not increase further even Tk1. 

At the end of March last year, the defaulted loans in the country's banking sector crossed Tk1,00,000 crore for the first time. At the end of June that year, defaulted loans stood at Tk1,12,425 crore and at the end of December it stood at Tk94,331 crore.