The National Bank of Pakistan (NBP), operating in Bangladesh since 1994 is facing existential crisis incurring losses year after year. Its banking activities have now come to a standstill; insiders who are barred from talking with outsiders, said.
The bank’s default loans have increased in astronomical proportion over the years; one source said adding that its total loans now stands at Tk 1,374.8 crore of which 97.7 per cent is default loans. Bangladesh Bank data also corroborate the fact.
The NBP has four branches in the country with 76 employees but its loan disbursement exercise has been stagnant for several years owing to liquidity shortage.
Knowledgeable sources said the Pakistani bank fell into big trouble by giving loans to some fraudulent clients in 2013-14. The lender is yet to recover the sum, said a senior official of the foreign bank seeking anonymity.
The top loans defaulters of the bank include Ibrahim Textile, Cotton Group, Koba Group, World Tell BD, DG Knitting Company, Aleya Sweater, Sara Group.
As many as 65 officials including the former president of National Bank of Pakistan had to be punished in 2017 owing to loans irregularities in the lender’s Bangladesh subsidiary, he said.
“It is very difficult for us to recover the bad loans as most of the clients do not want to return the money because it is a Pakistani bank,” he added.
And because of the sluggish progress in loan recovery from defaulted borrowers, the bank has been in the red year after year. This Correspondent paid a visit to the bank’s Motijheel and Gulshan branches on Monday but saw no client. The bank officials were passing restful time due to lack of clients.
Loan disbursement has been suspended from last year, said Md. Quamruzzaman, the present country head and chief executive of the Pakistani bank’s Bangladesh operations.
“We are now emphasizing on recovery of fund from defaulters. We are trying our best to recover the money,” he said.
The bank has filed a total of 143 cases against 104 defaulters to recover the money, said Quamruzzaman, the first Bangladeshi to hold the post. Since 2015, the NBP has recovered a total of Tk 193.99 crore from defaulters, he said.
“Big amounts of money are in the process of recovery,” said Quamruzzaman, who joined the foreign bank in 2015 with the view to giving a special push to the loan recovery drive
Although it is a foreign bank, it is still bad news for depositors that a bank is making losses year after year, said AB Mirza Azizul Islam, a former advisor to a caretaker government.
“This is tarnishing the image of the country’s entire banking sector,” he said, adding that the central bank should take necessary steps in this regard. Established in 1949, the NBP is a subsidiary of the State Bank of Pakistan.
As of September last year, the bank has 1,511 branches across Pakistan with assets of approximately $20.2 billion. Besides, the bank has branches in 21 countries. At present, the bank has four branches in Bangladesh, located in Chittagong, Sylhet, Gulshan and Motijheel.