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Volume of NPL in SoBs shrinks in Q2, says Kamal

FE Report | Published: July 23, 2019 09:42:46 | Updated: July 23, 2019 13:03:45


Finance Minister AHM Mustafa Kamal. File Photo

The volume of non-performing loans (NPLs) in the state-owned banks (SoBs) declined in the second quarter of the calendar year 2019, finance minister AHM Mustafa Kamal said on Monday quoting provisional figures.

After a meeting with chairmen and managing directors of the SoBs at his secretariat office, the minister expressed satisfaction over the performance of the banks.

"We feel we are OK. We are in a good shape," he told reporters after the meeting.

When Mr Kamal assumed office, he said the volume of NPLs would not rise anymore. "The figure available to me shows that the NPL has not risen."

" It's a good sign. It will go further down once the exit provision is implemented," he added.

According to the minister, the volume of NPL in Sonali Bank came down to 25.5 per cent in April-June compared to 29.35 per cent in March.

In Janata Bank, the NPL declined to 35 per cent in June from 43.97 per cent in March while in Agrani Bank the NPL went down to 14.5 per cent in June against 16.65 per cent in March.

The NPL in Rupali Bank fell to 17 per cent in June from 18.15 per cent in March and in Bangladesh Krishi Bank, the NPL declined to 17 per cent in June compared to 18.46 per cent in March.

However, the figures for the June quarter of Bangladesh Development Bank and Rajshahi Krishi Unnayan Bank were not available.

Mr Kamal said the interest rate of bank loans will be brought down to a single-digit in line with declaration made by the Prime Minister.

People also want the loan interest rate to come down to single-digit, he added.

"Unless the interest rate is single digit, the NPL increases. Neither the businesses, nor the borrowers can make profit. So we are bringing the interest rate to single-digit for the interest of both parties," the minister said.

Mr Kamal said even if the loan interest rate can be lowered to 9.0 per cent, it will remain higher than that in other countries.

He said in Bangladesh the interest rate is not calculated in simple method rather in compound method.

"Due to compounding calculation the rate goes up," he said. The minister said the interest should be calculated in simple method. "I request you (the bankers) to implement the simple interest rate."

He also said the single-digit loan interest rate has already been implemented by state banks. Mr Kamal warned stern actions against wilful defaulters, who siphoned off money in the name of import and export or tucked away money inside the country to evade paying back.

However, if good borrowers who have become defaulters facing various problems come to the government, they will be given support, he noted.

He said many from the banking sector are already languishing in jail for their wrongdoings. "We won't spare anyone," he added.

syful-islam@outlook.com

 

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