State banks' cash recovery flatters to deceive

Despite the huge loan rescheduling spree, the four state-owned banks saw poor cash recovery from their top defaulters in the first nine months of 2018.

Sonali, Janata, Agrani and Rupali banks recovered a total of Tk 1,308 crore from defaulters between January and September last year in contrast to the rescheduled amount of Tk 2,722 crore, according to data from the Bangladesh Bank. 

Sonali and Janata recovered a higher amount than a year earlier during the period from their top 20 defaulters, but the other two recovered only a tiny amount.

Save for Sonali, the recovery from defaulters other than the top 20 ones was also slower.

The tendency of taking stay order against the default loans is mostly to blame for the slow recovery, said Mohammad Shams-Ul Islam, managing director of Agrani. As of June 2018, the state-owned banks have Tk 46,366 crore tied up with cases with the money loan court.

Many of the defaulters participated in the 11th parliamentary election by obtaining stay order against their default loans instead of paying back the amount. As a result, the banks could not recover much ahead of the polls, he added.

Agrani Bank rescheduled a total of Tk 416 crore during the period, and it recovered only Tk 2 crore from the top 20 defaulters in contrast to Tk 21.49 crore recovered a year earlier. Cash recovery from defaulters other than the top 20 non-payers during the period was Tk 205 crore, down from Tk 442.92 crore a year earlier.  

Rupali's recovery from top 20 defaulters stood at only Tk 2 crore, in contrast to Tk 152.70 crore managed in the first nine months of 2017.

The bank's recovery from defaulters other than the top 20 stood at Tk 113 crore in contrast to Tk 251.30 crore registered a year earlier. The bank did not reschedule any loans though during the first nine months of last year, according to data from the central bank.

Sonali and Janata's recovery from the top 20 defaulters improved thanks to huge loan rescheduling.

Cash recovery from the top 20 defaulters of Sonali was Tk 48 crore as of September 2018, up from Tk 31.14 crore registered a year earlier. Its recovery from defaulters other than the top 20 ones amounted to Tk 555 crore, lower than Tk 559.51 crore realised a year earlier.

The bank rescheduled Tk 1,472 crore from January to September of 2018, in contrast to Tk 232 crore rescheduled during the whole of 2017.

Scam-hit Janata recovered Tk 87 crore in the first nine months of last year, which is more than six times the amount it had managed a year earlier.

However, cash recovery from defaulters other than the top 20 ones declined to Tk 297 crore from Tk 405.74 crore during the same period. The bank rescheduled a total of Tk 834 crore in the first nine months of last year, according to the central bank data.