BB asks state lenders to hand in action plan

Bangladesh Bank yesterday sought an action plan from five state lenders on how to bring down their defaulted loans and reduce their capital shortfall this year.

The five state-owned banks -- Sonali, Janata, Agrani, Rupali and BASIC -- were asked to submit the action plan before the central bank in the shortest possible time, said a BB official.

The instruction came in a quarterly meeting with the five banks, held at the BB headquarters in the capital. The central bank meets with the five banks every three months to supervise and monitor their financial health.

The sate lenders are sitting on large default loans and capital shortfall for a long time now as they frequently breached the credit norms while sanctioning loans. The five banks' default loans stood at Tk 36,555 crore at the end of December last year, up from Tk 30,295 crore a year earlier.

At the end of the last year, four of the five banks faced capital shortfall amounting to Tk 8,852 crore -- an indication of their alarming financial health.