Thirteen public and private sector banks are on the list, according to the Bangladesh Bank latest data
The banking sector faced a combined provisioning shortfall of Tk12, 897crore at the end of June this year, exposing their faltering financial health.Thirteen public and private sector banks are on the list, according to the Bangladesh Bank latest data.
Of the 13 banks, four are state-owned, while the remaining nine are private commercial banks.
The thirteen banks are Sonali Bank, Agrani Bank, Rupali Bank, BASIC Bank, AB Bank, Bangladesh Commerce Bank, Dhaka Bank, Mutual Trust Bank, National Bank, Standard Bank, Shahjalal Islami Bank, Social Islami Bank and Trust Bank.
Some of the banks faced provisioning shortfall because they lent a large amount of funds in violation of banking regulations, it was alleged.
According to experts, the rising trend of defaulted loans in the banking sector is largely responsible for the huge provisioning shortfall.
According to the central bank data, the Agrani Bank’s shortfall stood at Tk852.88crore, BASIC Bank's at Tk3,073.5crore, Rupali Bank's at Tk982.73 crore and Sonali Bank's at Tk1942.2crore during the period.
The provision shortfall of AB Bank stood at Tk3,593.5crore, Bangladesh Commerce Bank's at Tk511.11crore, Mutual Trust Bank's at Tk126.45crore, Dhaka Bank's at Tk329.58crore, National Bank's at Tk727.83crore, Shahjalal Islami Bank's at Tk100.3crore, Social Islami Bank's at Tk370crore, Standard Bank's at Tk103.34crore and Trust Bank's provisioning deficit stood at Tk183.61crore.
As per central bank regulations, banks have to keep 0.50% to 5% provision with Bangladesh Bank against defaulted loans for general category, 20% against classified loans of sub-standard category, 50% against classified loans of doubtful category, and 100% against classified loans of bad or loss category.
The capital base of the 13 banks will erode significantly as they have to keep provisioning as per the central bank rules, says a Bangladesh Bank official.
Non-performing loans (NPLs) of banks rose by a staggering Tk1,551crore in three months till June this year, taking the amount of stress loan in the banking sector to Tk112,425crore.