The scam-hit Janata Bank has Tk 2,868.77 crore more added to its piles of defaulted loans in the past three months mainly due to the failure of two of its clients to repay loans.
The total amount of bad loans of the state-owned bank stood at Tk 17,304 as of December 2018, a threefold increase on Tk 5,818 as of December 2017.
According to information provided by the second largest government-owned bank to the Financial Institutions Division on January 31, 2019, the overall bad loans jumped to Tk 17,304 crore as of January 2019 from Tk 14,436 crore in September 2018.
The sharp increase in defaulted loans has largely been attributed to the failure by the bank’s clients Crescent Group and AnonTex to clear the loan repayment.
Janata Bank managing director Abdus Salam Azad, repeatedly approached, refused to comment on the critical condition of the bank.
A Janata Bank deputy general manager, however, at the instruction of the MD, informed New Age on Saturday that the entire loan of Tk 3572.98 crore given by the bank to five subsidiaries of the Crescent Group became defaulted.
Crescent Leather Products owed Tk 894.92 crore to the bank while Rupali Composite Leather Wear Limited owed Tk 923.39 crore, Crescent Tanneries Tk 173.51 crore, Lexco Limited Tk 446.26 crore and Remax Footwear Tk 1134.9 crore.
The DGM said that the overall defaulted loan of the bank would go up further in coming months as AnonTex was failing to clear debt against its loan worth over Tk 5,500 crore.
AnonTex Group has been lobbying for fresh loans from the same bank and met with former finance minister AMA Muhith on August 20, 2018.
Both AnonTex and Crescent Group were extended loan by the previous board of directors led by former chairman Abul Barakat from 2009 to 2014.
On January 30, Customs Intelligence and Investigation Directorate arrested the chairman of Crescent Leather Products and Crescent Tanneries MA Kader in connection with three cases filed for laundering a total of Tk 919 crore in foreign currencies.
CIID found in its inquiry that Crescent Group colluded with officials of Janata Bank’s Imamganj branch in Dhaka to launder a total of Tk 1,297.65 crore abroad against 657 fake export bills.
FID additional secretary ABM Ruhul Azad, who looked after the annual performance indicators of the state-owned commercial banks, said that growing defaulted loan was undermining performance of the state-owned bank.
He said the managing directors of the banks were asked on Thursday to improve recovery rate and not to show any excuse for failure in loan recovery.
Former Bangladesh Bank deputy governor Ibrahim Khaled has doubts that the bureaucratic exercise will be able to discipline the banks.
He rather suggests that the central bank should be given more power to oversee the stat-owned banks to check loan scams and high growth of sour loans.
At present, BB’s monitoring power over the state-owned banks is almost nothing, he notes.
Earlier in April 2018, Financial Institutions Division recommended five measures, including regular disclosure of identity of big loan defaulters, establishment of cells in the central bank to monitor defaulted loans of over Tk 100 crore and constitution of a separate High Court bench for speedy disposal of writs on loan recovery.
But most of the recommendations are yet to be implemented.