Dhaka, Bangladesh (BBN) – The central bank has asked the state-owned Janata Bank Limited (JBL) to prepare a strategic plan in consultation with its board of directors for implementation of the memorandum of understanding (MoU) signed with the former, officials said.
The instruction came at a meeting held at the Bangladesh Bank (BB) in the city on Sunday with BB Governor Atiur Rahman in the chair to review implementation of the MoU by the JBL.
“We’ll monitor performance of the Janata Bank on the basis of the strategic plan,” a BB senior official told the FE after the meeting, adding that the JBL would have to take effective measures to implement the MoU properly.
The central bank earlier signed the MoU with the management of the JBL to improve its financial performance by lending policy support.
At the meeting, the top management of Janata Bank informed that they had already expedited the loan recovery drive through strengthening their recovery cells, the central banker said.
The percentage of default loans of the Janata Bank rose to 8.92 percent in September last from 6.14 percent as of June 30 last, according to the central bank statistics.
However, the average percentage of the banking sector’s default loans stood at 8.75 percent in September last, up from 7.17 percent as of June 30 last, the BB data showed.
“We’ve asked the JBL to expedite the loan recovery drive alongside improving its internal control to minimise risks,” the BB official said, adding that the Janata had been asked to improve treasury management for avoiding a mismatch between assets and liabilities in future.
The BB’s latest move came against the backdrop of large-scale irregularities in the commercial banks, particularly in the SCBs, in the recent months.
The amount of classified loans of Janata Bank rose to BDT 23.99 billion in September last from BDT 16.41 billion as of June 30 last year, according to the BB officials.
The JBL has also been asked to take effective measures concerning non-performing loans (NPLs), particularly against top 20 defaulters, to improve their financial health, the BB officials said.
The meeting also reviewed various issues, including liquidity position, credit growth, and cost of fund in line with the existing MoU, they added.
The central bank will hold meetings with two other SCBs — Agrani and Rupali — in this connection separately Monday and Tuesday respectively. Earlier on Thursday, the BB held a meeting with Sonali Bank Limited, the largest SCB.
BBN/SSR/AD-07Jan13-10:50 am (BST)
