Bangladesh Bank bars NBL from fresh lending

The central bank has imposed a number of restrictions on National Bank Limited (NBL), a first generation lender that has been witnessing declining conditions for the past one decade due to various irregularities.

Bangladesh Bank (BB) said it has made the decisions to protect the interests of the depositors who have perked over Tk43,000 crore in the bank as of March this year.

Of the restrictions, the BB said the NBL cannot lend afresh unless it brings down its loan-deposit ratio within stipulated 87 percent, down from over 95 percent now.

The central bank said the growth of loans and advances of NBL cannot be more than 10 percent, much lower than the BB’s private sector credit growth set at 14.8 percent for the current fiscal year.

“The NBL is not allowed to take over any loan of other banks and non-bank financial institutions,” a senior BB official told the Business Insider Bangladesh on Tuesday.

He said the bank has to report to the central bank about its top 20 borrowers on a monthly basis and it has to take approval from the central bank for appointment of additional managing director and deputy managing directors.

But for other banks, they need to take prior approval from the BB only for appointing a managing director.

The BB also ordered the NBL to bring down its single borrower exposure limit within the limit.

A dispute has surfaced among the directors of National Bank Limited (NBL) over the control of the private bank after the death of its chairman.

After the demise of Zainul Haque Sikder, chairman of the bank, on February 10, 2021, the board of directors of the bank dominated by the Sikder family, was in a fight to take control of the bank.