Janata Bank asked to go for out of court settlement of bad loans

Finance Adviser Dr Mirza Azizul Islam yesterday advised Janata Bank Limited (JBL) to go for out of court settlement for the recovery of overdue loans that increased gradually to 16 percent of the total loans and advances.
“It'll help increase bank's cash inflow as well as save legal expenditure and time to do other jobs,” he told the inaugural session of the bank's Annual Conference 2008 at Purbani Hotel.
Aziz said there might be many good borrowers who have become loan defaulters because of “rational reasons” and they might be interested to settle their loans outside the court.
Bangladesh Bank Governor Dr Salehuddin Ahmed and Finance Secretary Dr Mohammed Tareq also spoke at the session chaired by the bank chairman Suhel Ahmed Chowdhury.
The finance adviser said the government would gradually solve the lending problems of the bank with other government agencies as it had done for Bangladesh Petroleum Corporation (BPC) through the issuance of bonds.
He appreciated the bank's performance in respect to some indicators like deposit and remittance collection, but criticised its poor performance in recovering classified loans, and lower import financing despite 17 percent growth in overall imports.
About shortage of human resources in the newly transformed nationalised commercial banks (NCBs) into limited companies, Aziz suggested re-deployment of bank executives from a less busy section to another busy section.
He also suggested the bank to be more inclined to adopting modern technology and innovative products, and to improve client services to make the bank more service-oriented.
“The bank must implement its commitment properly to improve client services through a new 15-year work plan,” he said, assuring the government support to implement the plan.
The finance adviser, however, pointed out a challenge to be faced by Sonali, Janata and Agrani banks after having their new identity - on one hand they have social responsibility and on the other, they will have to earn profit for the government. “I hope, the bank will be able to face the challenge,” he said.
Bangladesh Bank Governor Dr Salehuddin criticised that the bank's performance in import financing particularly in industrial raw material and capital machinery declined last year while the extent of classified loans increased to about 16 percent, gradually rising from 12.0-12.5 percent in 2006 and 10.0-10.5 percent in 2005.
He advised the bank to improve efficiency of its human resources, adopt information technology widely, impose method of operation and introduce innovative products to bring qualitative change in client services.
Bank chairman Suhel Ahmed apprised the meeting of the 15-year work plan of the bank and sought cooperation of the government to implement the plan to take the bank much ahead of its present condition.