First News
Volume:7, Number:26
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THIS WEEK

Thirty-six Banks Have No Good Borrowers

| Ava Tahsin |

Out of the total 56 banks in the country, 36 have reported to the Bangladesh Bank that they found no good borrowers in the year of 2015. Some 16 banks kept lump sum provisions against potential payable interest rebate last year but did not pay out to their good borrowers in the current year. Only four banks – Islami, MTBL, RAKUB and HSBC – provided interest rebate to good borrowers as of July 2016.

Earlier on July 28, the central bank asked all scheduled banks to provide information about good borrowers including the number of good borrowers, the amount of interest rebate and provisions maintained against potential payable rebate. In response to the Bangladesh Bank’s instruction, 53 banks have reported their status but three of them – Sonali, Prime and Dhaka Bank – did not respond.

The total provision maintained by 16 banks against their potential payable rebate was BDT727.6 million last year, of which Islami bank provided an interest rebate of around BDT110 million, MTBL BDT10 million and RAKUB around BDT200,000, according to the central bank data.

Bangladesh Bank moved against the banks’ reluctance to help good borrowers. It asked the banks to provide related information within two days. The information includes the number of good borrowers with interest rebate and the amount of rebate given during 2015 and 2016. The banks have been asked to determine potential good borrowers with interest rebate during the year 2015 and 2016.

The letter also warned that action will be taken against banks that will not provide their good borrowers with interest rebate by the end of 2016. Earlier in March in the previous year, the central bank offered good borrowers 10 percent rebate on interest accrued against their loan accounts through issuing a circular.

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