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The name of one more private commercial bank (PCB) - the Social Investment Bank Limited (SIBL) - has been added to the list of 'problem banks' while the fate of another problem bank, the Pubali Bank Limited, is to be decided by the end of the month.
The Bangladesh Bank (BB) has already listed the SIBL as a 'problem bank' following its weak performance in a number of areas, including fund crisis, official sources said.
"We have already included the name of SIBL in the problem banks' list," a BB senior official told the FE Sunday. The bank has failed to comply with the existing statutory liquidity ratio (SLR) and cash reserve requirement (CRR) rules properly, he said.
Besides, the bank has been suffering from management problem, he noted.
Under the existing provisions, the SIBL has to maintain specific guidelines in addition to normal banking rules and regulations for improving its financial health.
Earlier, the central bank had put the SIBL under an early warning system for monitoring closely.
According to the BB's statistics, the bank disbursed around Tk 4.0 billion as loan and advances during the last year against a deposit mobilization of Tk 2.0 billion.
The amount of classified loan of the bank stood at Tk 1.61 billion by the end of June 2005, which was around 11.50 per cent of the bank's total outstanding loans.
Seven PCBs are now on the BB's list of 'problem banks'. They are: the Pubali Bank Ltd., the United Commercial Bank Ltd. (UCBL), the City Bank Ltd., the Oriental Bank Ltd, the First Security Bank Ltd, the BCBL and the SIBL.
However, the BB earlier asked the Pubali bank, the City bank and the UCBL to submit their special audit reports to it for assessment of their actual financial performances.
The financial performances of the banks have improved significantly under close monitoring of the central bank over the years, sources in the banking sector said. The central bank is now trying to get rid of the 'problem bank' category.
The Pubali bank and the City bank have been able to submit their special audit reports to the concerned department of the central bank for reviewing their real financial positions.
The central bank will review the audit reports and other financial indicators and see whether these banks are eligible to come out of the problem bank list or not.
"We have received audit reports from the Pubali bank and the City bank," another BB official said, adding that the fate of Pubali bank will be decided shortly.
The central bank took the move in addition to regular monitoring of the financial statements and other indicators furnished by the banks to review the performance of the banks.
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