National Bank Limited aims to regain its leading position among the country’s private banks with proactive support from the Bangladesh Bank and will pursue all legal avenues to recover defaulted loans, said its new chairman Abdul Awal Mintoo.
In a recent interview with New Age, Mintoo shared his plans to address the bank’s pressing challenges, including defaulted loans, regulatory issues and restoring customer confidence.
‘We will exhaust every legal options to take action against loan defaulters and reduce non-performing loans,’ Mintoo asserted.
While determined to address loan irregularities, he also recognised the need for flexibility.
‘For businesses genuinely affected by recent unrests, we may extend loan repayment terms to help them stabilise and pay back their debts,’ he explained.
Mintoo highlighted the crucial role of the Bangladesh Bank in helping stabilise the bank, particularly by providing liquidity support.
He said, ‘With adequate support, we believe we can regain stability and reclaim a leading position among private banks amid ensuring a compliant operational approach.’
Expressing the need for timely support from the central bank, he elaborated, ‘Liquidity support would enable us to meet obligations to depositors, open LCs and rebuild customer confidence. Without this assistance, which is a fundamental duty of the central bank, our day-to-day operations remain strained.’
The Bangladesh Bank on August 20 dissolved the National Bank board and appointed seven directors, including Abdul Awal Mintoo, to the board. The board elected Mintoo as the bank chairman on August 22.
Reflecting on his long association with the bank, Mintoo, who was a founding director of the bank from 1983 to 2006, spoke about recent management issues.
‘After I was arrested, Sikder Group started exerting influence on the bank board, and its influence became more powerful after Awami League was sworn in power in 2009.’
He pointed out how massive irregularities and unchecked spending had affected the bank’s standing.
‘National Bank became an example of severe lapses and corruption, with loans disbursed without regard for due diligence, often without collateral and, at times, through anonymous accounts linked to Sikder Group,’ he said.
The bank board did not assess customers’ capacity and the maximum threshold in accordance with the bank’s capital was not followed.
The bank’s current account with the central bank was negative.
Mintoo also criticised the central bank’s regulatory inaction, which, he said, allowed these issues to accumulate then in NBL due to political considerations.
He discussed the broader economic context, expressing concern over the high inflation rate, which he believes discourages savings and, in turn, affects investment and government revenue collection.
‘A lack of liquidity support could prevent us from providing essential services, such as opening letters of credit for importing vital goods, further exacerbating inflationary pressures,’ he observed.
‘Therefore, for banks to contribute meaningfully to economic expansion, the central bank must ensure liquidity. An overly contractionary monetary policy will only exacerbate production costs and inflation,’ he warned.
On the complex issues related to repatriating laundered money, Mintoo was realistic. ‘It’s a difficult task unless those responsible are willing to bring it back themselves,’ he said.
Addressing the need for reforms in the banking sector, Mintoo advocated for constructive, non-repressive measures.
He suggested a review of the numerous recent central bank directives, which, in his view, have largely favoured specific groups.
‘To amend rules effectively, the government should seek public opinions and consider broader, more inclusive feedbacks,’ he said.
