NCB performance under microscope

There are contradictions in the objective conditions in which the NCBs are working, or to be more precise, are being tasked to meet certain targets set for them. Operationally, credit growth has to be linked to deposit expansion. But demand for credit might increase, like it did last year owing to the floods, without a preceding increase in the level of deposits. One more vital, though not readily acknowledged, parameter of credit management is recovery of outstanding loans, especially from the big defaulters code-named the 'top twenty' for each bank. In this area, the four nationalised banks -- Sonali, Janata, Rupali and Agrani -- have not collectively fared too well. The breakup shows that Rupali Bank recovered Tk 2.78 crore only from the top defaulters owing it a whopping Tk 551 crore; Janata Bank realised Tk 9.31 crore out of Tk 513 crore owed to it by the top defaulters; Agrani fared somewhat better recovering Tk 102 crore from the top defaulters owing it Tk 638 crore; and Sonali, the biggest NCB, hit a rock bottom recovery at Tk 40 lakh only from 1555 crore outstanding against top loanees.

There are two ironical features to the whole story: one, the NCBs are saying that their operating costs went up because they had to spend large sums of money to lodge and pursue a huge number of cases against defaulters at the Artha Rin Adalats (loan courts). If they had not put money into wrong hands, for whatever reasons that happened, they wouldn't have landed in such expensive troubles. Secondly, fifty percent of the big default is traceable to government entities who refuse to repay. They have their job cut out. It's house-cleaning.

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