It seeks Muhith’s intervention to revise the BB condition 

Photo shows head office Rupali Bank at Motijheel in Dhaka  

Rupali Bank Limited has expressed doubt whether it would not be possible for them to overcome the losses if it has to comply with a new condition Bangladesh Bank is going to impose on the bank to increase credit growth by 12%.

Rupali Bank apprised Finance Minister AMA Muhith of their discomfort vide a letter served last week, said a senior official of the Bank and Financial Institutions Division.

The bank’s chairman Dr Ahmad Al Kabir requested the minister to use his influence in convincing the central bank to revise the condition.

The banking division said Bangladesh Bank has sent a new Memorandum of Understanding to Rupali Bank for signing as part of an effort to help revive its financial health.

In accordance with the proposed MoU, the central bank fixed a credit growth target of 12% or Tk976 crore for this year.

On the other hand, Bangladesh Bank has imposed a condition that the credit growth should not be more than 3% every quarter of this year.

Banking Secretary Dr M Aslam Alam told the Dhaka Tribune that the bank did not provide loans to the potential clients for last six years as it was under the process of privatisation.

As a result, the bank had distributed only a small amount of loan as compared to Sonali, Janata and Agrani banks for last couple of years, and that, the bank would face financial difficulties because of the credit growth limit, he said.

The Rupali Bank authorities viewed that the MOU would just impose extra financial burden. It would not be right to compare Rupali Bank with three other state-owned banks.

Rupali Bank has incurred an accumulated loss Tk1,200 crore during a period between 2002 and 2009. It could not also collect enough clients in last five years due to the accumulated loss.

M Farid Uddin, Managing Director of Rupali Bank, said the financial situation of the bank is different from the three other state-owned commercial banks. So, the credit growth limit is too high for Rupali Bank.