The Financial Institutions Division has issued a strict directive to state-owned Janata Bank PLC, ordering it to produce a specific roadmap to turn around the bank, which is severely troubled by financial distress and irregularities. The directive was issued at a high-level consultation meeting held with the bank’s board of directors.
The meeting was told that nearly 70% of the bank’s total loans are now classified as non-performing (NPL), a matter of major concern for the banking sector as a whole. The bank’s capital base has also become severely weak, and it is operating with a sharply negative net interest margin (NIM).
The meeting, chaired by Financial Institutions Division Secretary Nazma Mobarek, was attended by Janata Bank’s board of directors, its managing director and other officials. The meeting issued directives to achieve certain specific priority targets over the next 12 to 24 months, including: rapidly resolving large classified accounts; significantly reducing both the rate and the volume of defaulted loans; exercising caution in extending new large loans; increasing quality lending to the SME, agriculture and productive sectors; and further strengthening the culture of internal controls, audit and compliance.
Sources at the meeting said a large share of the defaulted loans is concentrated among a small number of influential clients. The bank was instructed to identify these large accounts and draw up separate, time-bound resolution plans for each. It was also instructed to treat cash recovery as a distinct key performance indicator (KPI) to boost the bank’s liquidity and income, rather than relying solely on loan rescheduling or write-offs.
The bank was also advised to exercise stricter caution over overdue export bills and money-laundering risks in foreign trade, and was asked to quickly present the board with a clear decision on whether to keep its Dubai or UAE operations running or wind them down in an orderly manner.
The bank was instructed to reduce its reliance on high-cost deposits and instead build up lower-cost, stable deposits and institutional accounts, while also drawing up a credible medium-term capital recovery plan. It was further instructed to regularly monitor the legal progress of major stalled court cases and to evaluate panel lawyers based on their performance in loan recovery.
Separately, the bank was told to move quickly to help prepare and distribute the “Krishak Card” and “Family Card,” both important national programs. Over the next one to two years, Janata Bank has been urged to meet specific targets, including rapidly resolving large classified accounts, significantly cutting both the rate and volume of defaulted loans, avoiding new large loans in favor of quality lending to the SME, agriculture and productive sectors, and further strengthening internal controls, audit and compliance culture.
The board and management were told they must jointly draw up a realistic, measurable roadmap to overcome the current crisis, one that clearly spells out what will be done, by whom, within what timeframe, and with what expected outcome.
Janata Bank PLC Chairman M Fazlur Rahman said the bank has begun work in line with the Financial Institutions Division’s directives, and that he expects the bank’s operations to become more dynamic going forward.
বাংলায় মূল প্রতিবেদন পড়ুন · Read the original Bengali report