Dhaka, Bangladesh (BBN) – The central bank of Bangladesh has asked four state-owned commercial banks (SCBs) to bring down their overall credit growth to 15 percent by December 31, officials said.

The instruction came at a meeting held at Bangladesh Bank (BB) to review the memorandums of understanding (MoUs) of four SCBs – Sonali Bank, Janata Bank, Agrani Bank and Rupali Bank on Sunday – with BB Governor Dr Atiur Rahman in the chair.

Chief executive officers (CEOs) who are also managing directors (MDs) of the banks were present at the meeting.

 “The central bank has asked the SCBs to bring down their credit growth to 15 per cent on year-on-year basis by the end of December in line with the existing MoUs,” a BB senior official said.

The central bank earlier signed the MoUs with the management of the SCBs aiming to improve their financial performance by providing policy support.

The central banker also said the SCBs have been asked to implement the existing core risk management guidelines properly for improving their efficiency.

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.

The SCBs will follow a ‘go-slow strategy’ for consumer financing in the near future to manage their assets and liabilities in line with the BB’s advice.

 “We’ll maintain such a strategy to bring down the credit growth to 15 percent by December 31, 2011,” a SCB chief executive said, adding that the SCBs have already strengthened recover drives to improve financial health through reducing the non-performing loans (NPL).

The central bank asked the SCBs to provide credit support to their clients, considering the deposit growth of each of such banks to manage their assets and liabilities efficiently, another BB official said.

At the review meeting, the central bank expressed dissatisfaction over slow disposal of pending cases relating to default loans and asked them to speed up the drive for default loan recovery through pursuing the cases that are lying pending with the courts.

BBN/SSR/AD-17Oct11-12:56 pm (BST) 


The SCBs have been asked to take effective measures for NPLs, particularly from the top 20 defaulters, to improve their financial health, the BB official added.


The meeting also reviewed various issues, including overall recovery of the default loans, liquidity positions, operating expenses and cost of funds.