Mounting Loans and Losses: Ailing state-owned agencies burden BB’s banking system
Staff Reporter :
Loans taken by various government agencies from state-owned banks have increased significantly as the institutions are failing to recover the losses.
The government agencies have taken a loan of Tk70,485 crore from five state-owned banks in the last couple years to meet their needs. But the agencies failed to repay the loans on time.
According to Bangladesh Bank data, the government firms default loans worth Tk183.62 crore.
The BB report said that government institutions take loans from banks at various times. But some were not able to repay the loan due to the insufficient profit.
Moreover, some companies have been making losses for a long time. As a result, the government has been forced to provide subsidies to the firms with a view to maintaining operations.
The BB data showed some 20 government organisations have taken a loan of Tk 70,485 crore from Sonali, Rupali, Janata, Agrani, and Basic Bank.
Of this, 41,230 crores are funded and 29,255 crores are non-funded. But the funded loans increased by Tk 373 crore, the data showed.
The government agencies are BTMC, BJMC, BSEC, BSFIC, BCIC, BPDB, DWASA, BOGMC, BIWTC, CPA, MPA, BIMAN, BRTC, BPC, TCB, BADC, BTB, BIWTA, BWDB and REB.
Eight of the agencies default on the loans, and the government bodies are BTMC, BJMC, BSFIC, BCIC, BRTC, TCB, BADC and BTB.
According to the data, the biggest defaulter is Bangladesh Jute Mills Corporation (BJMC). It took loans from Sonali, Rupali, Janata, and Agrani worth Tk 673.30 crore. But, Tk 131.30 crore has remained unpaid.
According to Bangladesh Economic Survey-2023 data, 10 out of 49 government agencies are making losses.
In the last financial year (2022-23), the government calculated a loss of around Tk 20,789 crore against the ten agencies.
Economists blamed corruption, inefficiency, and underproduction for the losses of state-owned enterprises. Dr. Mustafizur Rahman, a distinguished fellow at the Centre for Policy Dialogue (CPD), told The New Nation, “The government bodies have been making losses for years. So, it needs a major review or change in the agencies.”
“It’s time to take action as to which would be better to put in which method. Some of the agencies can be given to the private sector with a view to avoiding the losses,” he added.
