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State-run banks to focus on productive sectors

  • Anisul Islam Noor
  • 22nd August, 2021 10:26:31 AM
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The state-owned banks will focus on disbursing more loans in small and medium enterprises (SMEs) and cottage, micro, small and medium enterprises (CMSMEs), settling more money court cases to improve the investment capacity in productive sectors.

Sources at the financial institution division (FID) said as per the Annual Performance Agreement (APA) of state owned-banks, the banks have to settle around 4,187 cases in order to enhance investment capacity in potential sectors and came out from different unproductive and loss projects.

In the current fiscal year (FY), the target of case settlement has been increased by 708 to 4187. The number was 3,479 in FY 21, said an official of the financial institution division (FID), a wing of the ministry of finance.

Md. Abdus Salam Azad, Managing Director of Janata Bank, told the Daily Sun that state owned banks have been doing well in recent years and almost achieved the targets set by the FID.

He said the state banks have to reduce on an average 7 percent of their classified loan as per the directive of FID in the current fiscal year.

“The state-owned banks will focus on SME and CMSME sectors to help recover the country’s economy from the shock of the Covid-19 pandemic,” Abdus Salam said.

Replying to a query, he also said the state banks face a loss of Tk 5 billion on an average per year for opening Letter of Credit (LC) for state-run companies at nominal rates.

Besides, state banks have been providing around 20 categories of services including disbursing allowance of social safety net, freedom fighters and defence services pension free of cost, he said.

The state banks settled a total of 3979 cases in different categories including writs, against the target of 3479 set by FID.

According to the bank-based target, Sonali Bank will have to settle a total of 1,390 cases in three categories in the FY22. There are 40 writs, 350 Artho Rhin cases and 1,000 departmental and other cases.

Similarly, Janata Bank will have to settle a total of 1,080 cases including 80 writs, 150 Artho Rhin cases and 750 are departmental and others.

A total of 1,010 cases 60 writs, 250 Artho Rhin cases and 600 departmental and other cases filed against Agrani Bank need to be settled by FY22. Rupali Bank has given the target of settling a total of 457 cases including 35 writs, 292 Artho Rhin cases and 130 departmental and other cases. BASIC Bank will have to settle a total of 115 cases including 30 writs, 50 Artho Rhin cases and 35 departmental and other cases. DBL has to settle a total of 135 cases of which 25 writs, 90 Artho Rhin cases and 20 departmental and other cases.

The state-owned banks have to sign the Annual Performance Agreement (APA) with the FID in every fiscal year to achieve a target set by consultation of both the banks and FID.

As per the APA, Sonali and Agrani Bank have been able to settle additional writ cases against the target in FY21. On the other hand, Janata, Rupali, BASIC and BDBL failed to achieve the target of settling writ cases.