In such a situation, the Bangladesh Bank (BB) yesterday spelled out some corrective measures for bringing the loan defaulters to book.

The BB has instructed the NCBs to furnish it with lists of such cases that have remained unresolved for more than six months at the money loan courts. On receiving the lists, the central bank will consult the law ministry and take further legal actions against the listed loan defaulters.

At a meeting with the NCBs, presided over by BB Governor Fakhruddin Ahmed, the central bank yesterday reviewed their performance. These banks had signed a memorandum of understanding (MoU) with the BB on a set of performance criteria in June 2003.

BB deputy governors Nazrul Huda and Mohammad A Rumi Ali and chief operating officers of the NCBs also attended the meeting, which reportedly was alarmed by the fact of a huge sum of loans disbursed by the four banks from 1999 to 2002 being defaulted.

In the last calendar year, the NCBs recovered Tk 1,736 crore out of a total outstanding loan of Tk 38,495 crore. Of the recovered sum, Tk 647 crore was classified loans, out of a total outstanding amount of Tk 10,634 crore.

From its top 20 loan defaulters, who owe Sonali Bank Tk 1,555 crore, it could recover only Tk 11 crore in 2003.

The same year, Agrani Bank could recover only Tk 3.5 crore from its top 20 defaulters out of a total of Tk 565-crore default loans. Janata Bank got back a meagre Tk 2.3 crore from its top defaulters, who owe it Tk 517 crore, while Rupali Bank drew a blank from its top 20 defaulters, who have Tk 182-crore default loans from the bank lying with them.

The central bank yesterday told the NCBs that it would extend its one-year MoU with them for six months more, up to December this year.

It also asked them to submit to it their loan recovery targets involving the top 20 defaulters as well as others. The targets will be incorporated into the MoU.

Expressing his concerns over the new loan defaults, Fakhruddin Ahmed asked the NCBs to halt the trend.

Of the newly disbursed loans, over 9 percent of loans given by Sonali Bank in 1999 and 2000 and over 11 percent by Agrani Bank in 2000 were defaulted. Loans distributed by Janata Bank and Rupali Bank however have a much lower defaulting percentage.