The state owned schedule bank 'Bangladesh Development Bank Limited (BDBL) PLC', which was formed merging two separate specialised financial institutions - Bangladesh Shilpa Bank (BSB) and Bangladesh Shilpa Rin Sangstha (BSRS) - on January 3, 2010, has been struggling to survive with its huge manpower as its merger process with Sonali Bank has already got stuck.
After merger of the BSB and BSRS as BDBL, the new bank has started its operations as a commercial bank. During the period, the bank management has distributed a huge amount of loan in an unplanned way creating huge problems as the new bad loans have been added to the shoulder of the authority with the burden of previous defaulted loans.
As a result, the bank failed to succeed in business; rather, it is floundering now. Even after Bangladesh Bank (BB) appointed an observer to the bank, there has been no improvement. It has somehow survived by relying on income from share trading instead of banking business.
Several officials of BDBL, on condition of anonymity, said that after the merger, the institution has fallen into distress due to 'aggressive banking' after returning to a commercial character. Due to which 42 per cent of the loans have become defaulters. At the end of last December, BDBL's loan amount was Tk 2,313 crore. Of this, Tk 982 crore is defaulter.
A senior official believes that there are several reasons behind BDBL's such fate. He said, 'The bank made a big mistake immediately after the merger due to lack of experience in commercial banking. Other banks give loans to bad customers, which is now suffering. Although it is a commercial bank, it does not have any branches in important places. And the size of the bank has not grown. There is a large investment in the stock market, which has now deteriorated. As a result, the financial situation of the bank has deteriorated. We are trying to improve the bank by opening new branches and increasing deposits.'
In 2018, the total deposits in BDBL were Tk 2,831 crore, which decreased to Tk 2,421 crore in 2020. However, deposits increased to Tk 2,900 crore in 2021 and Tk 2,914 crore in 2022. In 2023, deposits increased to Tk 3,000 crore.
In 2018, the bank's loan amount was Tk 1,930 crore, which increased to Tk 2,129 crore in 2020. Loans increased to Tk 2,413 crore in 2021 and Tk 2,479 crore in 2022. However, loans decreased to Tk 2,313 crore in 2023.
In 2018, 46 per cent of the bank's total loans or Tk 889 crore were defaulted. This increased to Tk 982 crore in 2023, which is 42 per cent of the total loans. The bank has tried more or less to overcome this terrible crisis of defaulted loans, but it is not being able to do so. In 2018, the bank had 44 branches, which have now increased to 50.
It is known that the income that BDBL earned in 2022 after giving loans and paying interest to depositors came from investments in the stock market. In that year, the bank's net interest income was Tk 39 crore, while it earned Tk 75 crore from the stock market. In that year, the income from building rent was about Tk 20 crore. BDBL has multi-storey buildings in Motijheel, Karwan Bazar, Chittagong and Khulna in Dhaka. In addition, the company has a total of 27 bighas of land in Dhaka, Chittagong, Khulna, Jhenaidah and Rajshahi. The bank has two separate subsidiaries named BDBL Securities and BDBL Investment to do stock market business.
Out of BDBL's total defaulted loans of Tk 982 crore, Tk 600 crore is stuck with the top 20 defaulted customers. Out of these, 2-3 customers are inherited. Loans were given to other customers after the formation of BDBL. After disbursing these loans, they defaulted, which the bank is unable to recover. Zillur Rahman joined BDBL as its MD a few days after its inception. He held this position for five years. Most of the loans were given during his tenure.
According to the bank's annual report, the loan given in 2012 has now become the top defaulter. The bank owes Tk 110 crore to MM Vegetable Oil, a company of the Chittagong-based Mustafa Group. Tallu Spinning has a defaulted loan of Tk 69 crore, RR Spinning and Cotton Mills has a defaulted loan of Tk 65 crore, Delta Spinners and BR Spinning have defaulted loans of Tk 47 crore. In addition, Media International has a defaulted loan of Tk 38 crore and Sonargaon Textile has a defaulted loan of Tk 30 crore.
Another senior official said, "Some of the top defaulters have already deposited some money. We hope that these loans will be regularized. In this way, the amount of defaulted loans of the bank will reduce."
