Photo : Messenger
State-owned specialised Bangladesh Krishi Bank (BKB) has sunk even further due to a capital shortage, capitalised losses, a high rate of non-performing loans, and a weak internal control system.
However, it was known that Bangladesh Bank had given various instructions to the management of BKB to run the bank smoothly, but the instructions were never followed by the bank.
Bangladesh Bank has set a target to reduce Krishi Bank's default. This specialised bank of the state has failed to achieve this goal. Not only that, the bank’s defaulted loans increased by Tk 563 crore in a span of one year. Experts say that BKB and Rajshahi Krishi Unnayan Bank (RAKUB) are riddled with weak boards of directors, loan fraud, and corruption. Because of this, the overall condition of both banks is deteriorating further.
According to the data of Bangladesh Bank, as of June 30, 2022, the amount of non-performing loans (NPL) of Bangladesh Krishi Bank (BKB) was Tk 2625 crore. That year, Bangladesh Bank set a target to reduce defaults to Tk 1,969 crore by June of this year. This specialised bank in the country could not achieve this goal.
On the contrary, at the end of June this year, the bank's default increased by Tk 563 crore. At the end of June, Krishi Bank's default stood at Tk 3188 crore. 10.55 percent of the bank's total loans are in default.
The bank has disbursed loans of Tk 30,226 crore till June this year. In addition to defaults, Krishi Bank's capital deficit has increased to Tk 15540 crore as of June this year. And the security reserve (provision) deficit is Tk 52 crore.
When asked, a senior official of Bangladesh Bank told The Daily Messenger on the condition of anonymity, "There are many complaints against Krishi Bank, including concealment of information, as usual. The bank is gradually weakening due to management authority mismanagement and weak policies. Bangladesh Bank has taken various steps to improve the situation. Hopefully, the bank will turn around gradually.”
Shaukat Ali, Managing Director of the bank, told The Daily Messenger, “Our business success has increased in this one year. But besides this, defaults have also increased. There are several reasons for the increase in defaults. We are trying to reduce defaults. The role of this bank is very important in the agricultural sector of the country. The bank will do better in the future.
When asked why the defaults have increased, he said, “The real reason is still a mystery; it would be better if we talked face-to-face regarding the matter.”
However, another official of the bank said, “The bank is fulfilling its role as a specialised bank. Some places are facing problems. Non-performing loans are a problem for the entire banking sector. From that point of view, default loans have increased in our bank. We are verifying the reason for the increase and taking action accordingly. I hope this situation will improve in the next quarter.”
In this regard, Md. Mezbaul Haque, executive director and spokesperson of Bangladesh Bank, told The Daily Messenger, "Regular meetings are being held with the central bank to improve the condition of the state-owned specialised bank. Significant progress is also being made. We hope that the problem will be over soon.”
On the other hand, Rajshahi Krishi Unnayan Bank (RAKUB) is facing an almost similar kind of situation. Though the bank has not faced any new defaults, it could not achieve its target of decreasing the defaulted loan amount. Bangladesh Bank had set a target of reducing RAKUB's default to Tk 1073 crore by this June. But in June, the bank's defaulted loans stood at Tk 1430 crore, which is 19.95 percent of the bank's total loans. Apart from this, RAKUB's capital deficit has stood at Tk 2386 crore till June. Last March, the bank's capital deficit was Tk 2333 crore.
An attempt was made to contact the managing director of the bank, Niranjan Chandra Debnath, to know the latest situation. But he did not answer the phone. Sent a small message but did not reply.
However, an official of the bank said on condition of anonymity, "Bangladesh Bank itself has objections about the quality of the officers who are appointed to our bank by the government." Good officers are not appointed here. And we have to work with marginal farmers. You have to be more tactful and efficient to work with them. There will be no improvement in the bank until good.
Messenger/Fameema
