& çâÌæÚUæð´ ·¤è ¥ôÚU Îð¹Ùæ ÁæÚUè ÚU¹ð´ ¥ÍæüÌ ¥ÂÙð ÜÿØ ÂÚU ŠØæÙ ÚU¹ð´Ð ãæÚU Ù ×æÙð´, €UØô´ç·¤ ·¤æ× ·¤ÚUÙð âð ¥æÂ·¤ô ©gðàØ ·¤è Âýæç# ãôÌè ãñ ¥õÚU ÁèßÙ ·¤æ ¹æÜèÂÙ ÎêÚU ãôÌæ ãñÐ ÖÜð ãè ÁèßÙ ×ð´ ç·¤ÌÙè Öè ·¤çÆÙæ§ü €UØô´ Ù ¥æ°, çÁ™ææâæ ¥õÚU ©ˆâæã ÕÙæ° ÚU¹ð´Ð ŠØæÙ ÚU¹ð´, ÜÿØ ã×ðàææ ¥æÂ·Ô¤ Âæâ ãôÌð ãñ´ çÁ‹ãð´ ÂæÙð ·Ô¤ çÜ° ÂýØæâ ¥æÂ ·¤Öè Öè àæéM¤ ·¤ÚU â·¤Ìð ãñ´Ð

BASIC Bank's credit rating sees steep fall

Sajjadur Railman
A credit rater downgraded the troubled BASIC Bank's rating by nine notches this year from a year ago, sounding an alarm over the lender's growing vulnerability to collapse.
In its latest report, Credit Rating Agency of Bangladesh (CRAB) attached CCC1 to BASIC Bank, taking it down from BBB1, which means the ailing bank needs a financial lifeline and carries a very high credit risk.
In 2013, CRAB had downgraded BASIC Bank's ratings by five notches to BBB1 from AA2in2012.
The rating agency also lowered the bank's short-term rating to ST-5 from ST-3, mean-
ing that the bank has inadequate capacity for timely repayment of obligations. CRAB has also withdrawn the bank's Government Support Rating (GSR), which controls funds injection by the government.
The bank's rating outlook is negative this year, just as in the previous year.
" The downgrade of BASIC Bank's ratings reflects the heightened risks the bank may face and that it may be unable to sustain in the medium to long term without considerable government explicit financial support as well as visible steps to improve governance and management," the rating agency said in its latest report. FROM PAGE 16
"The strong showing of 'very weak' governance and subsequent operational failure leads the bank to a vulnerable position," the report added.
It also said BASIC Bank has failed to produce proof of any explicit financial support from the government with a mandate of fresh equity infusion and structural reform since its last rating in July last year, which led to the withdrawal of GSR.
The ratings and outlook reflect the bank's deteriorating condition. Once a healthy bank, BASIC came to the spotlight early' last year after the central bank unearthed major irregularities involving around Tk 4,500 crore in the bank. BASIC granted many of these loans without proper documentation and scrutiny.
The bank gave loans to nonexistent companies and approved loans to clients immediately after they had opened accounts with the bank. Moreover, the bank's board sanctioned loans before the branch sent the loan proposal to its bank headquarters. In violation of banking rules, the bank showed interests as income against many loans that had not been paid.
All these anomalies were possible because of the bank's board and top management, which were found to have helped the companies embezzle the money. Last month, Bangladesh Bank removed the bank's managing director from his job for his involvement in the irregularities. BB also recommended the government dissolve the board of directors.
The bank faces significantly heightened risks to its financial profiles, including asset quality, provision shortfall, negative profitability, liquidity crunch from domestic retail operations and its negative capital position, according to CRAB.
The rating report also said the bank may face an outflow of deposits due to the bank's deteriorating creditworthiness.
"In this context, we think that retail funding pressures could intensify further in the short term as debate continues on the possibility that the government would provide fresh equity accompanying policy conditions," said the report.
The report also found BB's role as supportive to restore the financial system in the bank.