The central bank has asked state-owned Agrani Bank Limited (ABL) to take necessary measures for improving its financial health through expediting classified loan recovery drives, officials said.
The directive came at a meeting held at the Bangladesh Bank (BB) Monday with BB Governor Atiur Rahman in the chair to review implementation of the memorandum of understanding (MoU) by the ABL.
"The Agrani Bank will have to improve its situation about default loans for strengthening its overall financial conditions," a BB senior official told the FE after the meeting.
The BB's latest directive came against the backdrop of a rising trend of default loans with the ABL in the recent months despite close monitoring by the central bank.
The percentage of default loans of the ABL rose to 18.60 per cent in September last from 12.94 per cent as of June 30 last, according to the central bank statistics.
However, the average percentage of the banking sector's default loans stood at 8.75 per cent in September last, up from 7.17 per cent as of June 30 last, the BB data showed.
The amount of classified loans of ABL rose to Tk 36.15 billion in September last from Tk 25.23 billion as of June 30 last year, the BB data showed.
The ABL has also been asked to take effective measures concerning non-performing loans (NPLs), particularly against top 20 defaulters, to improve their financial health, the BB official added.
The central bank will hold a meeting with state-owned Rupali Bank Limited in this connection today (Tuesday). The BB earlier held meetings with Sonali Bank Limited and Janata Bank Limited.
During the meeting, the top management of Agrani Bank informed the BB authorities that they had already expedited the loan recovery drive through strengthening of their recovery cells, a central banker said.
The ABL has also been asked to prepare a strategic plan in consultation with its board of directors within this month for implementation of the MoU signed with the former, according to the BB officials.
The central bank earlier signed the MoU with the management of the ABL to improve its financial performance by providing different policy supports.
Expressing concern over the mismatch of funds, the BB officials asked the ABL to minimise the gap between assets and liabilities immediately through improving its treasury management.
"We've also asked the Agrani Bank to improve its internal control to minimise risks in the future," another BB official said without elaborating.
The meeting also reviewed various issues, including liquidity position, credit growth and cost of fund in line with the existing MoU, they added.