The Financial Express

National Bank asked not to disburse loans over Tk 100m without permission

| Updated: January 24, 2023 08:42:36

National Bank asked not to disburse loans over Tk 100m without permission

Bangladesh Bank has asked the National Bank not to disburse loans of Tk 100 million or over without permission from the central bank.

Previously the central bank had ordered the bank to completely stop disbursing loans amid scams in May 2022. It lifted the ban in December.

The latest restrictions on the private commercial bank’s activities came on Monday after the resignation of its managing director, reports bdnews24.com.

Central bank spokesman Mezbaul Haque said the National Bank will not be able to disburse any loans for projects, imports or against export orders. For more than Tk 100 million or over of current capital, consumer, farm and CMSME loans, it will need to take the central bank’s clearance.

The customers must pay 100 per cent of the import cost to open letters of credit at the bank.

The conditions will be applicable to loans that are awaiting disbursement.

The bank’s Managing Director Md Mehmood Husain submitted his resignation last week, but the board of directors is yet to take a decision on the matter.

The board is controlled by directors from the Sikder family that owns Sikder Group. Monowara Sikder is the chairman of the board while MP Parvin Haque Sikder is the chairman of the executive committee.

No managing director of the bank was able to complete their term in the past decade. In 2021, the post was vacant for over three months.

According to its financial report until September 2022, the loans disbursed by the bank totalled Tk 418.37 billion. Its defaulted loans amounted to Tk 113.35 billion, or nearly 27.5 per cent of the total loans.

It counted Tk 3.86 billion in losses in the first nine months of 2022. The bank had a negative earning per share of Tk 1.2.

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