Delinquent borrowers who failed to repay large sums of bank money are getting fresh loans in collusion with a section of bankers through such roundabout way, according to sources in the banking circles.

Professional bankers find the ways and utilise those at the instructions from some members of respective bank boards, taking risks of the central bank's punitive action.

The news agency investigated the impact of Bangladesh Bank's effort to improve governance in the commercial banks and observed that the banks were still sanctioning fresh loans to the defaulters.

Bangladesh Bank has set guidelines for the commercial banks to improve their management efficiency to reduce their high operational costs so that they can reduce interest rates on loans to facilitate investment.

According to an Asian Develop-ment Bank (ADB) estimate, the operational cost in the banking system of Bangladesh is a staggering 3.13 percent of net assets against an international standard of only one percent. In India, it is 2.5 percent.

"We sanctioned fresh loan to a party who, as we know, is a defaulter," admitted a credit officer of a private commercial bank, requesting anonymity. "What we do is make sure that the party's overdue loans have been rescheduled taking money from the fresh loan."

The technique applied: the bank first helped their client reschedule the previous loan, procure Bangladesh Bank's Credit Information Bureau (CIB) report that he is no more a defaulter and then activated the fresh loan at a deferred date.

The bank, however, charged due interests incurred for the days behind the date.

To sanction the fresh credits the bank has been convinced that the party would eventually be able to pay back the loans after overcoming his temporary shortcomings. It also considered a lucrative lending rate the party offered.

In some other cases, another banker said, defaulters run from one bank to another seeking bankers' help to bail them out from the difficulties they are facing due to the Bangladesh Bank measures freezing the defaulters' entitlement to fresh credits.

"We're also trying to take the advantage of the scared clients of other banks to make them ours, but after cautious evaluation of their business condition," he said.

Another ploy was also revealed in the investigation that the bank directors, who had earlier directed loans, now avoid making direct edict on the loan proposals and ask verbally their appointed bankers to sanction loans.

As a result, the bankers were in fear that they would have to lose their jobs as per new regulations if Bangladesh Bank's inspection teams--a bit aggressive these days--once uncover the malpractice.

"We hardly could bypass an instruction from the directors in the past," said an officer of a private commercial bank, apprising how his senior colleague avoided awarding a loan to an ineligible client despite instructions from a Board member of his bank.