State banks' turnaround in 2014
Four state banks raised their performance last year following close monitoring by the central bank and the finance ministry's banking division.
In 2014, Janata, Sonali, Rupali and Agrani saw their default loan recovery edge closer to the target set by Bangladesh Bank, while their loan growth stayed within the ceiling.
For all latest news, follow The Daily Star's Google News channel. The disclosure comes after the central bank recently reviewed the banks' performance, a source of concern for the government after the International Monetary Fund and the World Bank flagged them as a potential risk to the economy.
The review showed that no banks crossed their individual loan growth limits in 2014, while Sonali's credit growth even declined year-on-year. Rupali's loans had been ballooning in recent years, but last year its loan growth stayed within the BB-placed bounds.
As for loan recovery, the four banks could manage 63 percent, or Tk 1,995 crore, of the target. From their top 20 defaulters, they retrieved 70 percent of the Tk 339-crore target.
Zaid Bakht, chairman of Agrani Bank, said the loan recovery target set by BB is not possible to attain: if any defaulter does not pay back in time, the bank takes legal steps against the customer and settlement of loan cases through that channel is time-consuming.
Last year, the four banks settled 242 cases involving Tk 349 crore, according to the BB review.
Yet, there are a large number of loan cases pending with different courts. Until December 2014, the state banks had a total of 16,392 unresolved cases involving Tk 21,475 crore The banks were also instructed to bring down their classified loans by at least 20 percent year-on-year in 2014, which Sonali and Rupali managed to achieve. In contrast, Janata and Agrani saw it increase.
Meanwhile, a high official of the banking division said further improvement should be expected from the four banks in 2015.
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