Defaulted loans of the state-owned entities increased by around 65 per cent in the past two years amid a lack of initiative to realise those, finance ministry officials said.
The amount of bad loans incurred by nine state-owned entities rose to Tk 184.76 crore until February 2024 from Tk 111 crore by the same time of 2022, according to The Bangladesh Economic Review 2024.
The classified loans of the state-owned entities are excluded from the Tk 1.82 lakh crore bad loans incurred by the private sector borrowers until March 2024 which, according to economists, left a number of banks largely dysfunctional.
The Bangladesh Economic Review 2024 that revealed the classified and outstanding loans incurred by the state-owned entities in the statistical appendices also showed that classified loans of the Bangladesh Jute Mills Corporation alone increased by Tk 74 crore in the past two years.
The BJMC鈥檚 bad loans stood at Tk 132 crore until February 2024 from Tk 58.2 crore until February 2022.
BJMC chairman Farooq Ahmed, who joined the loss- making state entity in January 2024, said that they were seeking assistance from the Finance Division to clear the classified loans.
He said that they were also consulting with the Bangladesh Bank regarding the issue.
The Bangladesh Textile Mills Association and Bangladesh Agricultural Development Corporation had defaulted loans worth Tk 24.9 crore and Tk 21.27 crore respectively as of February 2024.
The Bangladesh Tea Board had classified loans of Tk 4.62 crore, while the classified loans of the Bangladesh Sugar and Food Industries Corporation, Bangladesh Chemical Industries Corporation, Bangladesh Road Transport Corporation, Bangladesh Petroleum Corporation, and Trading Corporation of Bangladesh each stood below Tk 1 crore as of February 2024.
Finance ministry officials said that these state-owned entities took these loans mainly from the state-owned banks, including Sonali, Janata, Agrani, Rupali and BASIC.
They put the growing bad loans of the state-owned entities down to a lack of initiatives for realising the loans.
Of the state-owned banks, the BASIC Bank鈥檚 overall non-performing loans stood at 63.7 per cent of its overall loans until December 2023, mainly because of the shady loans of Tk 4,500 crore, given by the bank board led by its former chairman Sheikh Abdul Hye Bacchu between 2009 and 2013.
Bangladesh Bank has taken an initiative to merge BASIC Bank with another bank to enable to function it better.
The outstanding loans taken by 30 state-owned entities also increased to Tk 65,089 crore until February 2024 from Tk 48,362 crore as of February 2022.
The Bangladesh Agricultural Development Corporation, Bangladesh Petroleum Corporation and Trading Corporation of Bangladesh mainly contributed in the growing outstanding loans.
BADC outstanding loans stood at Tk 17,703 crore from Tk 8,356, while BPC鈥檚 outstanding loan increased to Tk 9,863 crore from Tk 5,066 crore in between the 2-year period.
TCB鈥檚 outstanding loans jumped to Tk 7,446 crore from Tk 1,343 crore.
Policy Research Institute executive director Ahsan H Mansur said that the defaulted loans of the state-owned entities would increase in the coming days because most of them ran inefficiently.
Out of 50 state-owned enterprises, 13 incurred losses in the outgoing FY24 with overall losses of the entities stood at Tk 6,041 crore, according to the Bangladesh Economic Review 2024.
Losses of both the Power Development Board and TCB exceeded Tk 6,000 crore. The BPC made highest profit of Tk 4,875 crore among the state-owned entities until April of FY24.聽聽聽聽
Ahsan H Mansur said that the government should run its entities more effectively to reduce the fiscal burden.
Former caretaker government adviser Hossain Zillur Rahman lamented that the country鈥檚 economy had been trapped in inefficiency due to lack of human resources.
Economists criticised that the government failed to improve service delivery by the bureaucrats despite significant enhancement in salaries and remunerations over the past one decade.
