Rejoinder, our reply
Janata Bank has sent a rejoinder to a report headlined “Bad loans put Janata in trouble” published in The Daily Star on July 24.
Following is the full text of the rejoinder signed by the bank’s Deputy General Manager Md Mizanur Rahman:
In the report, it is mentioned that the bank’s provisioning shortfall has hit a whopping Tk 8,256 crore (December 2018). It also added, “According to BB data, Janata last time faced provisioning shortfall of Tk 82 crore in March 2012. Since then, it was doing well and never failed to maintain the required provisioning till March this year.” It is simply contradictory.
Janata Bank has invested a huge amount in Treasury bill and bond, quoted and unquoted shares. Currently, the investment is around Tk 18,000 crore. It always maintains excess CRR (cash reserve ratio) and SLR (statutory liquidity ratio) with the Bangladesh Bank. Its nostro account balance always remains robust.
Janata has been lending money on call and short notices to other banks. More importantly, the lender is continuously opening LCs (letters of credit) amounting to millions of dollars for BPC (Bangladesh Petroleum Corporation), BCIC (Bangladesh Chemical Industries Corporation), BADC (Bangladesh Agricultural Development Corporation), DGDP (Directorate General of Defence Purchase) and Petrobangla and making payment of all the foreign bills in time.
The comments made by renowned financial sector experts are being followed to some extent. Though corporate governance failure is very much common in most of the sectors, nothing like that has happened to Janata Bank that the bank should go to the extent of liquidation. The bank is very much regular in paying its liabilities in time. Even it paid hundreds of crores (of taka) for a single transaction both in national and international business. So, the depositors’ money with Janata Bank is very much safe and secured.
OUR REPLY
Janata Bank did not contradict any point in the report. The Daily Star ran the report based on a Janata Bank letter to the central bank on June 19 this year.
We did not mention in the report that Janata’s provisioning shortfall was Tk 8,256 crore as of December 2018. The Tk 8,256-crore figure was mentioned as Janata’s provisioning shortfall in its June 19 letter to the central bank.
Janata’s provisioning shortfall skyrocketed in recent months due to a rise in its nonperforming loans that stood at Tk 21,410 crore or 44 percent of its total loans as of March this year. And this happened because of a few big defaulters, including AnonTex and Crescent Group.
Our report also contains comments from the managing director of Janata Bank.
We stand by our report.