5 branches of four state-owned banks each disbursed most of forced loans
Sonali, Janata, Agrani and Rupali disbursed a major portion of their total loans through five particular branches
The amount of forced loans of four state-owned banks is increasing and a lion's share of these loans are accumulating in a few branches.
According to the Bangladesh Bank's data, the amount of forced loans in four state-owned commercial banks has increased to Tk9,222 crore till this June.
In the six months from January to June, forced loans of Sonali, Janata and Agrani banks increased by Tk309 crore. But Rupali Bank was able to recover some of its forced loans – the amount ultimately decreasing by Tk75 crore.
According to the Bangladesh Bank, the amount of Sonali Bank's forced loan increased by Tk6 crore from December 2020 and stood at Tk2,728 crore in June. The forced loan of Agrani Bank increased by Tk267 crore and that of Janata Bank by Tk36 crore.
At present, Rupali Bank has Tk915 crore of forced loans.
Former governor of the Bangladesh Bank Dr Salehuddin Ahmed said, "Most of the banks do not properly scrutinise the businesses when guaranteeing an LC of any organisation. Forced loans are increasing because of this.
"If the bank assessment is not corrected, the amount of this loan will increase day by day."
Domestic banks issue letters of credit guarantee to foreign banks against import of goods. After the imported goods arrive in the country, the importer pays the money to the bank and it then pays the money to the foreign bank.
If the importer does not pay the money, the local bank forcibly or compulsorily creates a loan in the name of the importer, according to international norms. The local bank repays the debt of the foreign bank after recovering the forced loan.
Meanwhile, in the last 10 years, the banking sector has witnessed several major loan frauds. Most of these frauds have taken place through state-owned banks. The lion's share of these loans were disbursed through branches where the loans had been forged.
According to the Bangladesh Bank, Janata Bank disbursed Tk63,435 crore in loans till June this year. Among these loans, Tk45,662 crore, which is 72% of the total loan disbursed, was released from only five branches.
The three other state-owned banks also disbursed a major portion of their loans through five of their branches each.
According to the data of the central bank, Rupali Bank has disbursed Tk35,691 crore loans till June this year. Of the loans, 61% was released through five branches only. Besides, 47% of Agrani Bank's Tk54,385 crore loans was disbursed through five branches.
Sonali Bank disbursed Tk60,988 crore till June, of which Tk18,737 crore through five particular branches. At present, the total number of branches of this bank is 1,228.
Former BB governor Dr Saleh Uddin Ahmed told The Business Standard that it is unfortunate for the banking sector that a major portion of the total loans of the state-owned banks was disbursed through a few branches.
"A good portion of the total loans of these banks is being accumulated by very few branches. The banks will have to suffer in the future because of this," he said.