Dhaka, Bangladesh (BBN )– The overall default loans of state-owned commercial banks (SCBs) increased by 1.87 per cent in June last despite strict monitoring and execution of tougher laws against delinquent borrowers.

Concerned over the rise in non-performing loans (NPL), the central bank of Bangladesh is expected to give the SCBs a fresh directive to intensify the drive for recovering default loans, particularly from their respective top 20 defaulters.

The directive will be spelled out at a review meeting of the SCBs to be held at the central bank on November 3 next with Bangladesh Bank (BB) Governor Salehuddin Ahmed in the chair, officials said.

“We’ll ask the SCBs to take necessary measures to reduce their default loans immediately,” a BB senior official told BBN in Dhaka, adding that performance of the SCBs is not up to the mark.

The total amount of default loans with four SCBs climbed to BDT 152.89 billion in June last against the total outstanding loans of BDT 461.42 billion. The NPLs stood at BDT 142.12 billion in March last, according to the central bank statistics.

The official also said the central bank will also ask the SCBs to enhance competitiveness through improving the quality of their services.

The SCBs have already taken a series of measures to gear up their drives to recover default loans, particularly from their respective top 20 defaulters.

“We’ve taken different measures to strengthen the recovery drives aiming to reduce the amount of default loans as per advices of the BB as well as stakeholders,” Managing Director and Chief Executive Officer of the Agrani Bank Limited Syed Abu Naser Bukhtear Ahmed told BBN in the capital, Dhaka.

He also said the Agrani Bank Limited has already fixed the recovery targets of default loans at its different levels across the country. “We are hopeful that the situation will improve by the end of December.” he added.

BBN/SI/SSF/AD-30October08-1:31 AM (BST)