• Monday, Aug 08, 2022
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BB governor asks Janata Bank to improve its financial health

  • Published at 11:03 pm March 21st, 2021
Janata_Bank_Motijhil_FB
Collected from Janata Bank's Facebook page

In the December quarter, the bank's capital shortfall stood at Tk 5,475.1 crore, rising by a staggering Tk 5,217.5 crore in just three months

Bangladesh Bank Governor Fazle Kabir has instructed the state-run Janata Bank to improve its financial health as the lender's balance sheet is not satisfactory.

He gave the instruction at the inauguration ceremony of the Bangabandhu Corner at the head office of Janata Bank in Motijheel on Sunday.

Finance Minister AHM Mustafa Kamal inaugurated the Bangabandhu Corner and the mural virtually from his office as chief guest.

Once, Janata was a people's bank, the minister said adding the bank’s balance sheet is “not very satisfactory”.

The BB governor said Janata Bank should focus on increasing its capital adequacy ratio (CAR) and reduce its high amount of non-performing loans (NPLs).

The NPL ratio of Janata Bank is higher than the sector's total NPLs, he added.

In the December quarter, Janata’s capital shortfall stood at Tk 5,475.1 crore, rising by a staggering Tk 5,217.5 crore in just three months, according to the central bank’s latest data.

At the end of last year, the state-run lender's defaulted loans stood at Tk 13,622.5 crore, which was 24.9 per cent of its total outstanding loans.

The bank's deposit growth was satisfactory last year, but loans and advances did not grow to expected levels, Kabir said.

The central bank governor instructed Janata to focus on the implementation of the incentive packages, especially the stimulus package for the small, micro and medium enterprises announced by the government.

Financial Institutions Division Senior Secretary Ashadul Islam addressed the inaugural function as one of the special guests.

Janata Bank Chairman SM Mahfuzur Rahman acknowledged their weak financial health and said they are trying to improve it.

The bank’s Managing Director and CEO Abdus Salam Azad addressed the welcome speech in the inauguration ceremony.

The financial health of the state-run bank has deteriorated mainly to a number of businesses, including Anon Tex and Crescent Group.

The bank lent upwards of Tk 10,000 crore to AnonTex and Crescent Group, going past its single-borrower exposure limit, according to a BB probe.

AnonTex Group, a garment manufacturer, was also involved in money laundering, as per the central bank probe report.