National Bank of Pakistan to close Bangladesh branch over failure to recover 98% loans

The government-owned NBP has branches in 21 states and assets worth $20 billion.

Exterior view of National Bank of Pakistan in Dhaka, Bangladesh, on March 2019. (Zahid Islam/Online)

The NBP (National Bank of Pakistan) is closing one of its branches in Bangladesh.

This was after the bank failed to recover nearly 98% of its loans from Bangladeshi debtors.

National Bank of Pakistan (NBP) in Bangladesh.

The government-owned NBP has branches in 21 states and assets worth $20 billion.

It has been operating in Bangladesh as NBP-BD since 1994, with four branches in three cities, serving around 8,000 customers.

The bank ran into trouble from 2013 onwards after numerous debtors — mostly from the apparel sector — failed to meet loan obligations.

In December last year, NBP-BD’s defaults added up to $164 million, or 97.7% of its total loans.

“We’re going to close the operations at our Sylhet branch due to an extraordinary situation,” lamented Mohammad Quamruzzaman, the NBP-BD chief executive.

“The headquarters (HQ) in Pakistan has given us the approval, and the shutdown process is underway.”

National Bank of Pakistan (NBP) Vector Logo | Free Download - (.SVG + .PNG) format - SeekVectorLogo.Com

According to Quamruzzaman, the bank has filed 143 cases against loan defaulters in the past six years, recovering around $23 million.

The bank was now trying to retrieve more without litigation and had suspended loan disbursement last year.

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

The Bangladeshi economist, Policy Research Institute executive director, Ahsan H. Mansoor, said the NBP’s situation was extraordinary as defaulted loans are about 10% of all loans at banks in Bangladesh.

“This is an unbelievable situation that NBP-BD is struggling with around 98% defaulted loans,” he said.

“There should be an investigation into who were these borrowers and how it took place.”

As per the NBP-BD’s Annual Report 2019, its branches recorded a net loss of BDT 664 million in 2019, up 60% Year-Over-Year (YoY) as compared to BDT 415 million of 2018.

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  • کس پاگل نے مشورہ دیا تھا بنگلہ دیش میں برانچیں کھولنے کا یہ بنگالی کتے پاکستان سے نفرت میں ویسے ہی پاگل ہوے ہیں ان کی بینکنگ کورٹس کیسے اپنے شہریوں کے خلاف اور پاکستانی بینک کے حق میں فیصلہ دے سکتے ہیں

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