Defaulted Loans: Pvt banks to devise new strategies | The Daily Star
12:00 AM, January 13, 2019 / LAST MODIFIED: 07:03 AM, January 13, 2019

Defaulted Loans: Pvt banks to devise new strategies

Private commercial banks will set fresh strategies to curb the rising defaulted loans in the banking sector.

The decision was taken yesterday at a joint meeting organised by the Bangladesh Association of Banks (BAB), a platform of sponsors of private banks, and the Association of Bankers, Bangladesh (ABB), an organisation of managing directors of private lenders.

ABB Chairman Syed Mahbubur Rahman has been assigned to prepare a “working paper” within the next 10 days on how to recover defaulted loans, said meeting sources.

Rahman, also managing director of Dhaka Bank, will make the report in consultation with top executives of banks.

Nazrul Islam Mazumder, chairman of the BAB, presided over the meeting, held at the BAB office in the city. Most of the chairmen and managing directors of private banks attended it.

The two organisations have taken the decision as part of instructions given by Finance Minister AHM Mustafa Kamal on Thursday.

Kamal asked the BAB leaders to take initiative to halt further rise of defaulted loans in the banking sector.

After getting the working paper, the BAB and ABB will sit together again to finalise the strategies to halt the upward trend of non-performing loans (NPL) in the banking sector.

The final strategic paper will be submitted to the finance minister to take action on the issue.

ABB chief Rahman told the Daily Star yesterday that they had discussed different issues at the meeting to improve the financial health of banks.

As of September last year, NPL accounts for 11.45 percent of the banking sector's total loans, according to Bangladesh Bank data.

In terms of amount, it stood at Tk 99,370 crore -- the largest yet in the country's history.

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