Sonali Bank’s bad loan situation frightening
JS sub-committee finds
Sonali Bank's defaulted loans are very alarming, said a parliamentary sub-committee in a report.
Many of the borrowers could not be traced and there was no collateral on many of the loans, said the report, adding that the bank's annual recovery rate from major defaulters was less than one percent.
The Parliamentary Committee on Estimates formed a sub-committee on January 3 last year to investigate the financial irregularities in the state-run Sonali Bank, Social Islami Bank, National Bank of Pakistan, National Finance Ltd, and Premium Leasing and Finance Ltd.
Ruling Awami League MP Waseqa Ayesha Khan was the convener of the sub-committee. The two other members of the committee were Jatiya Party lawmaker Ahsan Adelur Rahman and AL lawmaker Khadizatul Anwar.
The sub-committee submitted its report at a meeting of the main committee at the Jatiya Sangsad Bhaban yesterday.
Contacted, Waseqa said, "The report will be discussed later by the main committee and the recommendations will be conveyed to Bangladesh Bank."
The sub-committee made 14 recommendations, including legal action, quick identification of willful defaulters, and limiting the bank's board of directors' ability to grant loans.
In December 2020, loans defaulted by 5.5 lakh borrowers reached Tk 17,762 crore at Sonali Bank. A year later, the number of defaulters fell to 3.76 lakh, but the bad loans rose to Tk 18,786 crores.
As of April this year, the number of defaulting borrowers was 3.97 lakh while the defaulted loans stood at Tk 18,712 crore. The recovery of defaulted loans was 7.59 percent in 2021 and 6.22 percent in 2020.
According to the report, the amount of secured collateral against large loans is only 60 percent of the debt, which is not enough. There were deficiencies in data verification in lending.
Meanwhile, in the case of small loan defaulters, the security deposit was 150 percent.
The report also said that the probability of recovery of small defaulted loans of the bank is higher than that of major defaulters.