As decision on offloading shares hangs in the balance for the last 13 years, the specialised long-term lender ran into dormancy, showing a cloudy future to its dispirited staff.

BSRS, a state-owned financial institution, was involved in diverse activities such as long term lending, consumer lending, taking deposits, underwriting, stock brokering and fund managing and many others. But the privatisation dilemma has forced the authorities to squeeze its operations.

With a gloomy future many officials left the financial institution. The depleting manpower and increasing government restrictions almost put a stop to BSRS financial activities.

Earlier, the government placed the classified loan-burdened BSRS on privatisation list but presently maintains a go-slow policy on its disinvestment.

The Privatisation Commission two months back appointed a chartered accountant company to assess assets and liabilities of BSRS. But the finance ministry asked the commission to decelerate its privatisation deferring the financial assessment.

Sources say the government advances slowly and cautiously before privatising large state undertakings such as BSRS and public banks. Now, Rupali Bank is the government's priority for privatisation.

Frequently subject to government embargo on certain activities, BSRS was barred from extending any loan between 1985 and 1995. The government also stopped channelling foreign fund to BSRS from 1985, almost choking its lending activities. BSRS was also barred from providing loans over 25 percent of working capital of a project.

The BSRS officials and employees now want a clear-cut decision about their future. "We do not oppose privatisation. But no headway has been made in the last 13 years. The government should either privatise it or withdraw the restrictions," an official said echoing the 175 staff of BSRS.

"The prime problem of BSRS is its high classified loan amount which is 65 percent of total advance. Apart from that it is performing well. It is only one of the two public financial institutions after BASIC Bank that makes profit," Mohammad Farhad Hossain, managing director of BSRS, told The Daily Star.

"BSRS pioneered industrial lending soon after the independence. Many of the state-owned enterprises took loan from BSRS and were closed down later. The high classified loan resulted from there. BSRS has problems but its full potential is still untapped," he said.

BSRS earned a pre-tax profit of Tk 8.6 crore in FY 2003-2004, , Tk 8 crore in FY 2002-2003 and Tk 12 crore in 2001-2002. It pays Tk 1 crore on average to government exchequer as dividend and tax.

BSRS has an outstanding loans of Tk 703 crore and Tk 561 crore overdue. It also wrote off Tk 901 crore. With a paid-up capital of Tk 70 crore, total loans and advance stood at Tk 617 crore, total assets at Tk 772 crore and total liabilities at Tk 553 crore as on June 30, 2004.