The state-owned Janata Bank is reeling under high non-performing loans (NPL) as well as capital and provisioning shortfall, official sources said.
At the end of March 2022, the defaulted loans of Janata Bank stood at Tk 13,125 crore, which was 19.10 percent of the total outstanding loan of the bank worth Tk 68,703 crore. The defaulted loan was Tk 12,320 crore at the end of December 2021.
The bank also had a provisioning shortfall worth Tk 8,136 crore at the end of March 2022, which was Tk 10491 crore at the end of December 2021.
However, Janata Bank has been able to reduce the capital shortfall. The current capital shortfall of the bank is Tk 723 crore, which was Tk 4256 crore at the end of December 2021.
The state-owned Janata Bank is in the marginal status in the CAMELS rating system of Bangladesh Bank.
The CAMELS is an international rating system used by regulatory authority to rate banks and financial institutions.
The BB marks financial institution or bank as strong if CAMELS rating stands at less than 1.50. The financial institution or bank is marked as satisfactory if its CAMELS rating stands between 1.50 and 2.50 and it is marked as fair if its CAMELS rating stands between 2.50 and 3.50.
A financial institution or bank is marked as marginal if its CAMELS rating stands between 3.50 and 4.50 and the BB marks it as unsatisfactory if its CAMELS rating stands between 4.50 and 5.
At the end of December of last year, Janata Bank’s CAMELS rating stood at 4.23.
Md Abdus Salam Azad, Managing Director of Janata Bank, told The News Times that they are trying to overcome the problems. “There is no alternative to loan recovery to reduce default loans. We are doing that. Hopefully a good result will come in the June quarter.”
He said the capital and provision shortfall has decreased and the bank is trying to do better in the coming months. Sirajul Islam, spokesperson and executive director of Bangladesh Bank, said the central bank is monitoring the situation and hoped the Janata Bank will be able to turn
