State Owned Janata Bank has been experienced a bitter Tk 2500 crore financial losses due to coronavirus pandemic. The bank management was also been instructed to reduce its defaulted loans by almost half in a year from Tk 19000 crore to Tk 900 crore.
The Financial Institutions Division (FID) of the Ministry of Finance has asked Janata Bank management to reduce default loans under the annual performance agreement (APA) of the Ministry. The agreement was signed recently with the banks.
According to the bank’s data, Janata Bank’s defaulted loan balance was Tk 23,200 crore in the fiscal 2019-2019. As a percentage, the loan rate was 40 percent. In the last financial year, this position stood at Tk 19,000 crore.
According to the agreement with the FID, Janata Bank will have to collect Tk 490 crore in defaulted loans (Tk 450 crore from classified loans and Tk 40 crore from canceled loans) in the current financial year 2020-21. The bank has to earn operating profit of Tk 600 crore (of which net profit of Tk 90 crore). The bank also has to reduce its loss branches by 56 and a total of 1,060 different cases have to be settled.
Besides, in the current financial year, Tk 650 crore will have to be disbursed in the agriculture sector and Tk 3,500 crore in the SME sector.
Janata Bank’s in its own assessment has said, the main problem of the bank is it is currently facing acute capital deficit. “Big amount of in defaulted loan, slow pace of case settlement and unequal competition with private banks are other challenges the Janata Bank has to face,” it said.
It is learned that out of the total defaulted loans of Janata Bank, the two groups have about Rs 10,000 crore. These two groups are the Crescent Group and the Anantex. Younus Badal, the head of Anantex, has taken almost the entire loan of Rs 6,000 crore. Anantex opened debentures for importing raw materials at various times but did not repay the money.
On behalf of the companies, the bank itself has been forced to pay the money to the foreign exporters. The customer was supposed to pay it but they did not pay it. Janata Bank has made forced loans against these claims. The group has borrowed the most from Janata Bank’s Imamganj branch through irregularities and corruption.
On the other hand, the Crescent Group has taken financial benefits of more than Tk 5,000 crore from various government funds and Janata Bank. The company has taken cash export facility from the government by making fake export bill of leather, but has not returned the money to the country even after exporting. There are crescent footwear shops in different cities of the country including the capital. Now they are forced to sell shoes at a discount of 75 percent. This organization is headed by two brothers. One is MA Kader and the other is MA Aziz. He is also the head of Jazz Multimedia. Legal proceedings are underway against them, including arrests.