BB asks all banks to ensure proper use of loans
The Bangladesh Bank today asked all scheduled banks to strengthen monitoring of their disbursed loans with a view to ensuring the intended use of funds.
Bankers who sanction, disburse and monitor loans will be slapped with stern actions if they show any negligence in carrying out their responsibilities, according to a central bank’s instruction to managing directors of all banks.
The central bank came up with a same instruction in March last year, but majority of the banks have not obliged, contributing to a sharp rise in default loans, a BB official told The Daily Star yesterday.
Default loans rose to Tk 88,589 crore in March, up from Tk 74,303 crore in December 2017, according to data from the BB.
Some unscrupulous people frequently divert loans to the sectors not stated in their credit proposal, the BB official said.
The latest notice said that the Credit Risk Management Guidelines issued by the BB clearly stated the responsibility of banks from the selection of borrowers to the monitoring of disbursed loans.
There will be no diversion of loans from the authorised sectors if the guidelines are followed properly, the BB said.
It also added: “It’s not possible to ensure the use of disbursed loans properly if the board of directors, the credit committee and the officials concerned don’t carry out their responsibility.”
The central bank also asked banks not to release an installment if the preceding one is not used properly by borrowers.
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