IMF to check updates on BASIC Bank

Posted by BankInfo on Wed, Nov 04 2015 10:40 am

Troubled BASIC Bank will figure prominently in discussion during the upcoming visit of a delegation of the International Monetary Fund, central bank officials said.

The IMF team will also discuss other issues such as performance of the banking sector and soundness indicators, the overall situation of state-owned banks, recapitalisation, and medium term reform plans on non-performing loans (NPLs).

Rodrigo Cubero, deputy division chief of IMF's Asia and Pacific Department, will lead the mission that will arrive in Dhaka tomorrow on a two-week visit.

The IMF team will also discuss the exchange rate and balance of payments situation, but their focus will be on the indicators of the state-owned banks, the Bangladesh Bank officials said.

“We have sought details from BASIC Bank so that we can present those before the IMF team,” a BB official from the department of off-site supervision said yesterday.

Recapitalisation, NPL and loan recovery efforts of BASIC are the key issues that the IMF wants to know about, the official added.

According to BASIC Bank officials, the previous board of the bank, led by Sheikh Abdul Hye Bacchu, had lent around Tk 5,500 crore between 2009 and 2013.

Of the loans, around Tk 4,500 crore has become NPL, turning the bank into a capital-deficit lender. BASIC Bank is now in great trouble as it cannot lend for want of money.

BB has also sought information from state-owned Sonali, Janata, Agrani and Rupali banks.

“We are analysing the data of these banks,” said an official of BB's financial stability department.

The NPL of Sonali, Janata, Agrani and Rupali banks stands at more than 20 percent of their total loans as of June this year, against the industry average of around 10 percent.

Sonali's NPL tops the list with more than 24 percent.

On the other hand, capital shortage of state-owned banks was around Tk 11,000 crore as of June this year.

The IMF mission will also sit with senior finance ministry officials, including Finance Minister AMA Muhith. The government's plan to reduce fuel oil prices may be discussed at these meetings, said an official of the finance ministry.

On the basis of the visit, the IMF team will prepare a report for its headquarters. The report is likely to propose a number of recommendations to revive the ailing state-owned banks, particularly Sonali and BASIC.

News:The Daily Star/4-Nov-2015


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