Janata Bank has fallen short of all performance improvement targets set by the central bank in the first half of 2023, raising concerns as the state bank holds the second-highest volume of deposits and loans among the country’s 61 scheduled lenders. The compliance report from the central bank’s off-site supervision department highlights Janata Bank’s underperformance in metrics such as cash recovery from defaulters, reducing defaulted loan ratios, improving capital base, and credit growth.
The bank exceeded the ceiling for large loan portfolios, with 64% of its total portfolio consisting of large loans against a 30% limit. Janata also had the highest number of large loan borrowers defaulting. The central bank has urged a reduction in classified loans, but Janata’s classified loans increased by 87.8% in the first half of the year, reaching 32.6% of its total outstanding loans. Additionally, Janata failed to meet cash recovery targets from top defaulters and saw a deterioration in its capital position. The other state-owned banks, Sonali, Agrani, and Rupali, faced challenges in meeting their respective targets as well, with varying degrees of performance across different metrics.
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