A total of fifteen banks failed to keep the requisite provisions against their loans, particularly the classified ones, in the last calendar year (2018).
The 15 banks, out of 58, did not maintain the requisite provisions against loans, according to the central bank's latest statistics.
The banks included four state-owned commercial banks (SoCBs) and 11 private commercial banks (PCBs).
In 2017, nine banks, out of 57, failed to keep the requisite provisions against their loans. Of them, three were SoCBs, five PCBs, and the rest was development-finance institution (DFI).
In 2018, one SoCB and five PCBs were included in the list of such banks.
However, the total amount of provisioning shortfall came down to Tk 66.14 billion as on December 31, 2018, from Tk 67.67 billion on the same day of the previous year. It was Tk 54.70 billion as on December 31, 2016.
"The overall provisioning shortfall decreased slightly in 2018, as most of the banks were able to make higher profit," a senior official of the Bangladesh Bank (BB) told the FE on Wednesday.
The banks earned higher profits from their 'interest income', as they had charged higher interest on their lending while providing lower interest rates on deposits in line with the decision of the Bangladesh Association of Banks (BAB), he explained.
Under the existing BB regulations, the banks have to keep 0.25 per cent to 5.0 per cent provisions against loans of general category, 20 per cent provision against substandard category, 50 per cent against doubtful loans, and 100 per cent against bad or loss category loans.
"The banks will have to maintain due provisioning against all types of loans to protect the interest of depositors," another BB official told the FE.
He also said the banks normally keep required provisions, against their unclassified and non-performing loans (NPLs), from their operating profits in a bid to mitigate financial risks.
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