Banks will form a special cell for monitoring their top defaulters having defaulted loans above Tk100 crore.
Bangladesh Bank (BB) has asked them to form the monitoring cells in a bid to bring down the volume of bad loans in the sector.
BB’s Banking Regulation and Policy Department (BRPD) on Monday issued a circular in this regard.
According to it, a Deputy Managing Director (DMD), along with adequate manpower, will operate the cell.
The cell will draft the quarterly reports according to a BB-provided format. The boards of directors of respective banks, as well as the BRPD, will have to be updated the report.
Though BB believes the new move will bring down the volume of bad loans, Association of Bankers, Bangladesh (ABBD) Chairman Syed Mahbubur Rahman sees ‘nothing new’ in it.
“Such cells headed by the DMDs are already there although they did not have the specific ceiling on Tk100cr default loan,” said the ABBD Chairman.
The latest circular is looking to pressurize the banks a bit, he observed.
The central bank earlier issued a circular to provide incentives to good borrowers. Mahbubur Rahman termed the new circular as ‘a supplement to that’.
Rahman, also the Managing Director of Dhaka Bank, emphasized ‘political will’ to bring down the volume of bad loans.
Echoing his words, Executive Director of Policy Research Institute Dr Ahsan H Mansur suggested Bangladesh Bank be more active in this regard.
Soon after assuming office, Finance Minister AHM Mustafa Kamal announced that the bank loan default figure will not increase “by a single taka”.
However, according to the BB latest data, the non-performing loans (NPLs) of banks rose by a staggering Tk16,962 crore in a period of three months till March this year, increasing the amount of stress loan in the banking sector to Tk1,10,873.54crore, which is the largest ever in the country's history.
The bad loan amount was 11.87% of total disbursed loans in the given month, according to the latest Bangladesh Bank (BB) data.