Dhaka, Bangladesh (BBN) – The country’s four state-owned commercial banks (SCBs) are allowed to keep their net credit growth within 15 per cent this calendar year while interest charges of the existing loans will be excluded.
The year-on-year net credit growth was fixed at a meeting held at the central bank in the capital Dhaka on Sunday to review the memorandums of understanding (MoUs) of four SCBs – Sonali Bank, Janata Bank, Agrani Bank and Rupali Bank – for 2011, with Bangladesh Bank (BB) Governor Atiur Rahman in the chair.
“We’ve discussed the new MoUs of the SCBs for 2012 in the meeting,” an executive director of the BB said, adding that the SCBs will submit the new MoUs to the central bank after approval of their respective board of directors.
The chief executive officers (CEOs) cum managing directors (MDs) of the banks were present in the meeting.
“The overall net credit growth of the SCBs remains unchanged at 15 percent, but interest charges of the total loans will be excluded,” another BB official said. 
The central banker also said the SCBs will be able to provide more loans this calendar year in line with the new calculation system of the overall net credit growth.
He also said the central bank has also fixed the target of recovering default loans at 10 percent of the total outstanding loans of the top 20 defaulters of the SCBs of 2012.
The SCBs have been asked to improve their financial condition as well as to provide better services to their clients using latest technology, the BB officials said.
“The central bank would welcome if the SCBs spend more for installing new information technology-based system to provide better services to their clients,” a central banker noted. 
He also said the BB has also asked the SCBs to manage their assets and liabilities carefully to avoid any liquidity shortage in future.
The central bank earlier identified six core risk areas in the country’s banking sector. The risk factors are: credit, asset and liability, foreign exchange, information technology, internal control and compliance, and money laundering.
In the review meeting, the BB has also asked the SCBs to speed up their drive for default loan recovery through strengthening of their recovery cells.
The percentage of default loan of the SCBs has reached 11.27 percent, where that of the country’s banking sector average is 6.12 percent, the BB data showed.
BBN/SSR/AD-23Apr12-10:40 am (BST)