Loans of top 120 defaulters amount to over Tk 1000b, only Tk 4.69b recovered

The six state-owned banks—Sonali, Agrani, Janata, Rupali, Basic, and BDBL—are unable to recover loans at the desired rate from their top 120 defaulters.

Due to substantial non-performing loans and poor management, four out of these six banks are facing capital shortfalls.

Recently, the Financial Institutions Division of the Ministry of Finance reviewed the overall situation of these six state-owned banks and identified these issues.

The review highlighted various aspects of the banks. It was observed that although some state-owned banks are good at collecting deposits, they are providing fewer loans. Additionally, some of these banks are not providing loans to the small and medium enterprise (SME) and agricultural sectors as per the guidelines of the Bangladesh Bank.

According to sources in the financial division, a comprehensive analysis of the situations of these six banks for the years 2024 and 2025 was recently conducted

The Secretary of the Financial Institutions Division, Nazma Mobarek, held a meeting with the banks’ managing directors (MDs) to discuss the issue. The minutes of that meeting detailed various pieces of information regarding the overall status of the banks.

As per the meeting minutes, the top 20 defaulters from each of the six banks, totaling 120 individuals, owe a cumulative amount of Tk 926.27 billion in non-performing loans.

In 2025, they managed to recover only Tk 4.69 billion from these defaulters, which is 0.5 per cent or half a per cent of the total dues.

Rupali Bank was in a relatively better position in terms of recovering loans from its top defaulters.

Its top 20 defaulters owe Tk 87.74 billion, from which they recovered Tk 3.61 billion over the last two years. Janata Bank recovered Tk 560 million against dues of Tk 586.42 billion from its top 20 defaulters, and Sonali Bank recovered Tk 90 million against Tk 67.43 billion.

The financial division's analysis revealed that all banks except Sonali and BDBL are facing capital shortfalls. Among them, Janata Bank is in the worst position, and Rupali Bank's capital situation is also deteriorating. Basic Bank continuously remains in a negative position.

In the meeting, satisfaction was expressed regarding the deposit situation of six banks. Additionally, the financial institutions division advised the banks to ensure the effective use of collected deposits.

Secretary Nazma Mobarek advised Sonali Bank to increase its loans. She said that more loans should be provided to the SME sector rather than being limited to a few companies.

It was informed in the meeting that last year, Sonali Bank made a net profit of Tk 23.79 billion, which is the highest among the mentioned six state-owned banks. Although Agrani and Rupali banks made some profit, Janata, BDBL, and Basic banks did not make any profit last year.

When asked, Sonali Bank's MD Shawkat Ali Khan told Prothom Alo, “As deposits increase, loans cannot be given in the same proportion. Therefore, our loan-to-deposit ratio is a bit low. However, we have increased our target for loans in the SME and agriculture sectors.”

He also mentioned that legal cases are hindering increased recovery from the top 20 defaulters.

At the end of last year, the total non-performing loans of these six banks amounted to nearly Tk 1460 billion.

Among these, Janata Bank’s non-performing loans are Tk 725.39 billion Agrani Bank's are Tk 267.72 billion, Rupali Bank’s are Tk 196.70 billion, Sonali Bank's are Tk 179 billion, Basic Bank's are Tk 82.55 billion, and BDBL's are Tk 9.98 billion.

Janata Bank's default rate stands at 70 per cent, and Basic Bank's is the second-highest at 65 per cent.

Additionally, BDBL's default rate is 39 per cent, Rupali's is 38 per cent, Agrani's is 36 per cent, and Sonali Bank's default rate is 15.35 per cent.

It was informed in the meeting that last year, the banks recovered Tk 41.68 billion from their nearly Tk 1500 billion defaulted loans.

The amount of loans written off by the six banks is Tk 216.72 billion, of which Sonali Bank itself wrote off Tk 94.81 billion.

Last year, these six banks recovered Tk 2.45 billion from written-off loans.

Regarding the banks’ overall situation, former Chief Economist of Bangladesh Bank, Mustafa K Mujeri, told Prothom Alo, “The weaknesses of state-owned banks have been present for many years. Their capital has been maintained by government support. To make the banks self-sufficient, banking sector reforms and structural changes are necessary. Otherwise, problems will continue within the banks.”