Performances of Agrani Bank Limited, one of the leading state owned banks, has been questioned in recent months allegedly because of the sluggish practices in the bank by the top bosses.
Bank insiders fear that it may create an adverse impact on the country’s economic growth as well as on the image of the government.
Data shows that the classified loan of the bank stands now at Tk16599.00 crore increasing from the previous Tk 9987.00 crore which has lifted the ratio of classified loan at an alarming 26 percent from the previous 17 percent in 2021.
The deposit of the bank has also come down at Tk 85,000 crore fromTk 100864 crore ( in 2021) because the trust of general customers has become weaker leading many customers to withdraw their deposits.
Deficiency in investable funds has also been created as the Advance Deposit Ratio (ADR) of the bank is increasing.
Data shows the bank has been bearing a capital shortfall of Tk 4,000 crore contributed by the increased classified loan, downward trend of deposits and cash recovery.
Bangladesh Petroleum Corporation (BPC) imports fuel through the support of country’s leading state owned banks mainly like Sonali Bank, Janata bank, Rupali Bank and Agrani Bank.
In a letter, sent to Energy and Mineral Resources Division on May 11, 2023, the BPC alleged that Sonali, Janata and Rupali banks open 4 to 5 L/Cs every month for fuel import of BPC, but Agrani Bank is showing its negligence to open more than two L/Cs in a month.
Another company sent a letter to the Governor of Bangladesh Bank early this month seeking the central bank’s intervention to recommend Agrani Bank management to open L/C for importing capital machinery for the company for expansion of their project.
Meanwhile, many of the bank’s old and big clients like AbulKhair Group, Meghna Group, PRAN RFL Group, Bashundhara Gold Refinery, Jamuna Group, GPHIspat, City Group have already suspended their activities with Agrani Bank mainly due to the rigid attitude of the current management.
The risky asset of the bank has increased. As per the International Guideline for Standard Banking, BASEL-III there is provision of keeping the CRAR (capital to risk weighted assets ratio at 10.50 %) which now stands at 4.89 %.
It alleged that the poor administrative capacity and rigid attitudes of some of the top level officials including new Managing Director caused deterioration of banker-customer relationship at the bank. This has also caused reducing the cash recovery ratio of Agrani Bank which is now at 37 %.
Sources said seeking anonymity that the current administrative process and banking activities of the state run Agrani Bank, is going on sluggishly because of the slow going policy of the current Managing Director and CEO of Agrani Bank, Md. MorshedulKabir.
Despite making phone calls several times, this correspondent failed to reach the Managing Director to talk about this.
Sources, seeking anonymity, say that the slow going process in performing day to day work ultimately hinders the dynamism of routine activities of such a leading public sector bank.
Sources also say that the opinion gap between the Managing Director and board of directors in some areas has also been widening day by day.
Board Chairman of Agrani Bank, Zaid Bakht told Bangladesh Post that as the Managing Director has been appointed newly, it will take some time to understand everything.
Regarding the performance of the bank, Zaid Bakht said there are some historic reasons for the declining performance of the bank.
The export deficiency is also increasing constantly with Agrani Bank. Data shows that during the period of January 2022 the bank’s export was 344.89 crore which came down to 250.08 crore in January 2023. In February 2022 export was 226.73 crore which declined to 130.47 crore in February 2023 and on an average the declining ratio is Tk. 110 crore.
