National Bank Limited (NBL), International Finance Investment and Commerce (IFIC) Bank Limited, Shahjalal Bank, Arab Bangladesh (AB) Bank, Bangladesh Commerce Bank (BCB) Limited, One Bank Limited, and Social Investment Bank Limited (SIBL) have been put under the central bank watch, according to sources.

A BB report placed by its governor before the parliamentary standing committee on finance ministry on Monday said the seven banks have been brought under the early warning system because of their weak key financial indicators and to stop them from being labelled as 'problem banks'.

"Activities of the problem banks are closely monitored by the central bank with special guidance and care," a central bank high official said yesterday on condition of anonymity.

The central bank has also put First Security Bank alongside Pubali Bank, Oriental Bank, United Commercial Bank Limited and City Bank Limited on the list of 'problem banks' after it was rated 'marginal' for two consecutive years.

The central bank introduced CAMEL Rating in the mid-1990s based on the performance indicators of private commercial banks (PCBs). The rating marks a bank as a 'problem bank' for its lack of corporate governance, insider lending, increasing amount of defaulted and fictitious loans and capital and provision deficit, among other things.

Sources at the BB said the banks were put under the early warning system as default loans of some of them were on the rise and some others had weak internal control and management. AB Bank had 21.45 percent classified loans against outstanding loans, IFIC Bank 24.19 percent, NBL 28.80 percent, SIBL 10.03 percent, One Bank 6.06 percent, BCBL 28.13 percent and Shahjalal Bank 1.65 percent till March 31.

Two of the banks have counted Tk 300 crore in losses in foreign exchange dealing, leaving one of the two banks without any operating profit last year.