Janata MD set to retire leaving bank in financial woes

Abdus Salam Azad had joined Janata Bank as its managing director (MD) in October 2017, when the bank had a loan disbursement volume of Tk 459.58 billion and a defaulted loan on Tk 76 billion. 

He is all set to retire on 29 April after serving in the position for five and half years. With the course of time, the volume of disbursed loans in the bank rose to Tk 852.06 billion while the defaulted loan to 143.87 billion. 

It is evident that the volume of disbursed and defaulted loans almost doubled under Abdus Salam Azad. 

There was a time when Janata Bank was the best performing public sector bank of the country, with the best industrialists and businesses being its clients.  Now, its clients include top loan defaulting companies, including AnonTex and Crescent Group, and some influential business tycoons. 

The banking sector regulator, Bangladesh Bank, found various irregularities in the loan disbursement process of the bank, involving its MD Abdus Salam Azad, but could not take any action against him.

Rather, the finance ministry’s financial institutions division extended his tenure, allowing him to remain in the chair until he becomes 65. 

The Janata Bank was considered as a funding source for other government and private banks even several years ago. But it is now borrowing more or less Tk 80 billion daily to remain afloat. 

However, Abdus Salam Azad refused to take responsibility for the poor condition. In a conversation with Prothom Alo on 17 April, the outgoing MD said the bank had some undeclared defaulted loans and these were not taken care of properly during his tenure. All these issues eventually pushed up the volume of defaulted loans. 

“I have taken special measures against the top defaulters before my retirement. As a result, the situation will improve in the coming days. Other banks saw their deposits decreased in the current year, but our deposits increased by Tk 20 billion. Like other banks, we did not show a tiny figure of defaulted loans after writing off some loans,” he added. 

He still believes that the situation in the bank has improved in the meantime and it will do further in the future.   Loan disbursement rises, so does defaulted loan

In 2017, the bank had a deposit of Tk 649.44 billion while the amount of disbursed loan was Tk 459.58 billion. The figures rose to Tk 1014.66 billion and Tk 852.06 billion respectively in 2022. 

The bank had a defaulted loan of Tk 76 billion in 2017 and it rose to Tk 143.87 billion in 2022. 

However, the bank fared well in export-import financing. It had financed Tk 143.58 billion for import trade in 2017 while it rose to Tk 483.68 billion in 2022. 

On the flip side, its export business was worth Tk 139.92 billion and the amount rose to 219.76 billion in 2022. 

Once upon a time, the Janata Bank was prominent as a handsome profit making bank. But the days are over now as its net profit plunged to Tk 2.68 billion in 2017, from Tk 9.55 billion recorded in 2013. The profit nosedived in 2018, 2019 and 2020 as it went below the threshold of Tk 300 million. 

In 2021, the bank made a profit of Tk 3 billion thanks to a policy concession by the central bank. The officials are expecting a similar profit in 2022. 

Abdus Salam Azad has been replaced by the current managing director of Krishi Bank, Abdul Jabbar. Previously, he was in charge of the loan disbursement section of the Janata Bank.

The Janata Bank had owed around 100 billion in total to AnonTex Group and Crescent Group. The AnonTex Group has become a hot topic in the country’s banking sector when it topped the list of defaulters presented in the parliament in 2020. 

The group, under some 18 suitcase companies, pulled out around Tk 50 billion from the Janata Bank. All these companies belong to AnonTex MD Yunus Badal. The amount now stands at Tk 80 billion with interests. 

These loans were settled when Abdus Salam Azad was the managing director of the bank’s Janata Bank Bhaban branch. 

However, the Janata Bank board has recently decided to waive the entire amount of loan interests in favour of AnonTex, on the condition that Tk 48.2 of the net loan will be repaid by June. 

A Chattogram-based conglomerate was planning to acquire AnonTex, with its liabilities. But the plan hit a snag when the banks owned by the conglomerate faced a liquidity crunch, according to sources. 

The Janata Bank had owed Tk 30 billion to the Crescent Group. Of the loan, Tk 6.83 billion has been rescheduled. Some other defaulters are also claimed to have repaid their loans to the Janata Bank. 

Abdus Salam Azad said the Crescent Group resumed their business and will regularise its loan. They are in a process to bring Tk 5 million of export earnings home.  

The loan interests of AnonTex have been waived and another group is planning to acquire it, the outgoing MD said, adding that the bank will see improvement in its financial condition once these issues are settled. 

He also foresaw that the amount of defaulted loans in Janata Bank will come down to 11 to 12 per cent soon and it will be the lowest among public sector banks.

Some 18 per cent of the bank's total disbursed loans were defaulted in 2022, according to documents