Form cells to monitor large default loans

The central bank yesterday asked banks to form a special monitoring cell to keep an eye on defaulters with loans of more than Tk 100 crore. 

The cell will have to be formed immediately to give a boost to recovery from the large-scale default loans, according to a central bank instruction sent out to all lenders.

It will submit a statement to the central bank every quarter mentioning the recovery progress of the loans.

Banks will start off by submitting a statement to the central bank, depicting the situation of the large loans for the April-June period of this year.

The cell will monitor the default loans for eight quarters in a row even if they are rescheduled and unclassified.

A deputy managing director has to lead the cell and required workforce will have to be deployed. The board of directors of a bank will evaluate the statement to help the management.

The management will draw up a time-befitting work plan to speed up the recovery of default loans. If required, the board will give instructions to the management.

Default loans at banks stood at Tk 110,874 crore as of March this year, up 25.15 percent year-on-year.