NBP to close branch in Bangladesh over failure to recover 98pc loans

The National Bank of Pakistan (NBP) is closing one of its Bangladesh branches after failing to recover nearly 98pc of its loans from Bangladeshi debtors, the bank’s country head has said.

The government-owned NBP has branches in 21 countries and assets worth $20 billion. It has been operating in Bangladesh as NBP-BD since 1994, with four branches in three cities, serving about 8,000 customers.

The bank ran into trouble after numerous debtors — mainly from the apparel sector — failed to meet loan obligations, Bangladesh central bank data shows. In December last year, NBP-BD’s defaults amounted to $164 million, or 97.7pc of its total loans.

“We are going to close the operations at our Sylhet branch due to an extraordinary situation,” Mohammad Quamruzzaman, NBP-BD chief executive said. “The headquarters in Pakistan has given us the approval, and the shutdown process is underway.”

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In the past six years, the bank has filed 143 cases against loan defaulters, recovering about $23 million, Quamruzzaman said, adding that the bank is now trying to recover more without litigation and had suspended loan disbursement last year.

“Our high priority now is to recover the non-performing loans. We are focusing on an alternative dispute resolution (ADR) process where we sit at the negotiation table with the clients,” he said.

“The good news is that we are receiving some positive results in the ADR process where the banks offer concessions to the defaulters and they, in turn, get the opportunity to have a clear banking credit record,” he said. Without clearing their records, Quamruzzaman added, businesses “can’t avail loans from any other banks in the future.”

Manzoorul Alam, managing director of Ibrahim Composite Textile mill (ICTM), which borrowed $8.5 million from NBP-BD in fiscal year 2012-13, said negotiations with the bank are underway.

“During negotiation we offered the bank to repay around $16.5 million. We sent this proposal in December 2019 and there was no work last year due to coronavirus pandemic,” Alam said. “I had a discussion with the bank around three weeks back and they assured to resolve the matter shortly according to our negotiations.”

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17 COMMENTS

  1. Why isn’t profit covering the massive case of NBP against its pensioners who have been suffering since two years even though the supreme court has ordered NBP to pay 70% to pensioners and NBP continues to ask for a review and by fraudulent means, extends the date. You can get complete details from the FB page of the employees fighting the case.

    • Yes exactly 110% agree with you

      Meen bhee exactly yahee kahnay walaa thaa.

      Aur aab yea nuqsaan jinn executive bank officers kaa faisla ya idea thaa unhee hee say recover kia janaa chaey.

  2. NBP-BD should resolve their dispute using dispute resolution mechanism of SARCO (SAARC arbitration council ).
    #SARCO .
    Currently , Director General, Mr. Md. Helal Chowdhury is from Bangladesh.

  3. Banks always credit to business class without finance how Banks can earn profit. Credit officers may incompetent, credit committee is account able for default

  4. Loans were given out without any collateral in a
    like Bangladesh ? This is sure a risky business to be involved in. No wonder these Bank customer were not going meet the obligation to pay the bank back. Very bad business practices for sure.

  5. Its always been worst if you Cross limits . Percentage should be max 60 Percent for default. Bank credit officers and Branch manager along with management of bangladesh region is responsible for that loss. We pay half of that to Pakistani banker in their pay tha we got better results

  6. Wrong decision made by National bank head office to open their branches in banladesh . Pakistan have no friendly relation with
    Bangladesh . They are against Pakistan.

  7. All the senior officers of the bank should be investigated by competent authority. It is possible that they might have pocketed part of the money in collusion with the borrowers.

  8. Pakistan me loan dete howey mout pad jati he…aur bangladesh me branch khol kar loan bant-ttey phir rehey ho…buhat acha howa jo loan wapisa nahi kiya….

  9. Wahyat servic ha BOP ki… Remittance apny mulk ma tu ap deal nhe krsakty…. Pocket ma ha kuch nhe… Waha ja k. Unhy loan dy k apni thukwa li…

  10. There are rumours that major portion of the loans disbursed were against kickbacks taken by the senior management of that time. Hence it is also important that the guilty bankers are taken to task as after all it is taxpayers money and we are the tax payers

  11. There was no need to give loans to Bangladeshi citizens.They are habitually paupers and loan scammers.
    Who was this idiot gave this great advice of opening National Bank of Pakistan in Bangladesh?
    Now National Bank of Pakistan is directly responsible for its blunder.NBP should pay to the State Bank of Pakistan the money it has lost to defaulters.

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