Sonali Bank fell short of its credit collection target ranked among the top 20 failing organizations by a mile in the first eight months of this year.
The state-owned bank was only able to recover 0.43 percent during the period from the annual target of Tk 2,232 crore, according to data from the bank’s loan recovery division.
The 20 entities that defaulted on Tk 4,083 crore represent more than 37% of the bank’s total classified loans.
Until June of this year, Sonali Bank has disbursed loans amounting to Tk 54,684 crore, of which around 18.93% or Tk 10,351 crore has been in arrears, according to data from the Bangladesh Bank.
Among them, Modern Steel Mills Limited, which is expected to pay around Tk 228 crore this year, has so far repaid Tk 9.16 crore. The company owes the bank over Tk 457 crore.
On the other hand, Taipei Bangla Fabrics Ltd, a manufacturer and supplier of mesh sportswear fabrics, has not refunded a single penny in the past eight months against this year’s owed amount of 317 crore Tk. The company defaulted over Tk 331 crore from Sonali Bank.
Contacted, Zohir Uddin Ahmed, executive director of Taipei Fabrics Ltd, admitted to defaulting on the amount but declined to comment.
“I have nothing to tell you about that. You contact Sonali Bank,” he told The Business Standard.
The recovery from another defaulter, FR Jute Trading Co Ltd, amounted to only 0.79%, while its 0.09% from Abdur Razzak Ltd.
The other main defaulters are T and Brother’s Group, Halmark Group, Fair Trade Fabric, Rahman Group, Leena Group, Ratanpur Steel Re-Rolling Mills Ltd, Meghna Condensed Milk Industries Limited, Sonali Jute Mills Ltd, AK Jute Trading Co, Western Marine Shipyard Ltd. , Supreme Jute & Knitex Ltd, Sunbeam Textile Mills Ltd and Saiyan Corporation.
None of them repaid a single penny against Sonali Bank’s goal for the year.
Ataur Rahman Prodhan, Managing Director of Sonali Bank, told TBS: “Our goal is to recover the loans from defaulters by any means possible. We are contacting them personally. The bank’s board is working to recover the debt. money from them. “
“In addition, we have formed committees headed by deputy directors general. At the same time, we have taken legal action. Our attempt to recover the money through justice is also underway,” he said. also stated.
They also consider that many companies are not yet coping with the losses induced by the pandemic, he added.
The Rahman group has asked for its loan to be rescheduled and it could repay Tk 5-7 crore in a few days, he said.
“A warrant was also issued against Rahman Group recently. We will recover in any way the defaulted loans,” added the CEO of Sonali Bank.
Despite various initiatives by the government and the Bangladesh Bank, defaulted loans continue to swell in banks.
Until June of this year, banks disbursed around Tk lak11.40 crore in loans, of which Tk95243 crore was in default.
In April-June, the amount recovered was Tk 1,075 crore, which means that the overall rate was 1.89%.
The Bangladesh Bank has granted the loan moratorium facility to borrowers to cushion the fallout from Covid-19 for all of 2020.
The central bank later relaxed its loan classification policy, given the downturn in business caused by the pandemic.
Banks cannot classify any loans if borrowers pay 25% of each tranche of their loans until December of this year. They will have to pay the rest of each installment over the next year, according to the Bangladesh Bank circular.