Logo of National Bank Limited

The 50 per cent of 20 top loan defaulters, whose identities were disclosed by the finance minister AHM Mustafa Kamal in the parliament recently, are the clients of National Bank Limited (NB).

The bank, owned by the Sikder Group, is facing a severe liquidity crisis due to the defaulted loans on a large scale.

AHM Mustafa Kamal unveiled the list of big loan defaulters while replying to a question of the ruling Awami-League (AL) lawmaker Shahiduzzaman Sarkar.

It is learnt that the NBL is failing at times to deposit the Cash Reserve Ratio (CRR) to the central bank, due to the liquidity crisis that resulted in fines.    

In the given circumstance, the managing director (MD) of the bank, Mehmood Hossain, tendered his resignation letter though he later returned to his duty after meeting Bangladesh Bank (BB) government Abdur Rouf Talukder.

In the parliament, the finance minister said the defaulted loans amounted to over Tk 192.83 billion while the numbers of defaulters in all banks and the financial institutions are 786,065 as per the data preserved in Credit Information Bureau (CIB) as of November in 2022.

The bank company act says if any loan of a group turns default, then all of its loans are deemed as default, leading to halting the scope for the group to take loans from the bank in the future.

The 10 loan defaulters are CLC Power Company Limited, Western Marine Shipyard, Saad Musa Fabrics, SA Oil Refinery, Maisha Property Development, Radium Composite Textile, Samannaz Super Oil, Manha Precast Technology, Ehsan Steel Re-Rolling and Siddique Traders.

The SA Oil Refinery Limited, owned by Chattogram's SA Group chairman Shahabuddin Alam, has a debt of TK 11.72 billion while Samannaz Super Oil's debt Tk 11.30 billion. Both are clients of the NBL.

Shahbuddin Alam is a former director of the Mercantile Bank. The three other loan defaulters from the NBL are - Manha Precast Technology, Ehsan Steel Re-rolling Limited and Siddique Traders.

Of them, the Manga Precast Technology has a debt of Tk 6.47 billion, Ehsan Steel Re-rolling Limited Tk 6.24 billion and Siddique Traders has a debt of Tk 6.7 billion.

According to the data of the Bangladesh Bank, the amount of defaulted loans of the National Bank increased to Tk 113.35 billion, which was Tk 45.88 billion a year ago. Just in a year, the amount of the defaulted loans of the bank increased by Tk 67.47 billion. Now, some 27.46 per cent of the bank’s loan is in default.

On the other hand, according to the figures of the Dhaka Stock Exchange (DSE), the net loss of the bank in between January and September 2022 is Tk 3.57 billion. The bank had made a profit of Tk 1.34 billion within the same period the previous year. The net profit of the bank was Tk 3.48 billion in 2020.

Prothom Alo tried to contact top officials of the National Bank to know about the initiatives taken by the bank for the recovery of the defaulted loans. However, it was not possible to get any statement from the bank regarding this.

Earlier, Bangladesh Bank spokesperson Mezbaul Haque had said, “Although the National Bank MD has resigned, his resignation letter has not been accepted. The MD will have to join the work as per the law.”

However, a top official of the bank said that the board of directors body of the bank is yet to take the final decision regarding his return to work. An initiative has been taken to promote the DMD and to appoint a former MD as the advisor. And efforts are on to lessen the amount of defaulted loans by lodging cases instead of recovering them.

The private bank has been facing crises for the last few years. People relevant to the banking sector say the crisis increased after the Sikder group took over the ownership of the Bank.

The amount of defaulted loans of the bank is rising and at the same time the managing directors of the bank are not being able to complete their tenure.