‘Extraordinary’ loan delinquency forces Pakistani state-owned bank to close Bangladesh branch

The National Bank of Pakistan (NBP) has four branches in Bangladesh, serving about 8,000 customers. (Photo courtesy: NBP-BD.com)
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Updated 05 March 2021
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‘Extraordinary’ loan delinquency forces Pakistani state-owned bank to close Bangladesh branch

  • The National Bank of Pakistan has branches in 21 countries and assets worth $20 billion
  • As of December, NBP Bangladesh’s defaults amounted to $164 million, or 97.7 percent of its total loans

DHAKA/KARACHI, Pakistan: The National Bank of Pakistan (NBP) is closing one of its Bangladesh branches after failing to recover nearly 98 percent of its loans from debtors, the bank’s country head has said.

The state-owned NBP has branches in 21 countries and assets worth $20 billion. It has been operating in Bangladesh as NBP-BD since 1994, with four branches in three cities, serving about 8,000 customers.

The bank ran into trouble in 2013-24, after numerous debtors — mainly from the apparel sector — failed to meet loan obligations, Bangladesh central bank data shows. In December, NBP-BD’s defaults amounted to $164 million, or 97.7 percent of its total loans.

“We are going to close the operations at our Sylhet branch due to an extraordinary situation,” Mohammad Quamruzzaman, NBP-BD chief executive, told Arab News earlier this week. “The headquarters in Pakistan has given us the approval, and the shutdown process is underway.”

In the past six years, the bank has filed 143 cases against loan defaulters, recovering about $23 million, Quamruzzaman said, adding that the bank was now trying to recover more without litigation and had suspended loan disbursement last year.

“Our high priority now is to recover the non-performing loans. We are focusing on an alternative dispute resolution (ADR) process where we sit at the negotiation table with the clients,” he said. “The good news is that we are receiving some positive results in the ADR process where the banks offer concessions to the defaulters and they, in turn, get the opportunity to have a clear banking credit record.”

Without clearing their records, Quamruzzaman added, businesses “cannot avail loans from any other banks in the future.”

Manzoorul Alam, managing director of Ibrahim Composite Textile mill, which borrowed $8.5 million from NBP-BD in the 2012-13 fiscal year, said negotiations with the bank were underway.

“During negotiations, we offered to repay the bank around $16.5 million. We sent this proposal in December 2019 and there was no work last year due to the pandemic,” Alam told Arab News. “I had a discussion with the bank around three weeks ago and they assured to resolve the matter shortly according to our negotiations.”

Pakistani officials at the NBP’s head office in Karachi were unavailable for comment despite repeated requests. Bangladesh Bank, the central bank, declined to comment.

Zahid Hussain, former lead economist of the World Bank in Dhaka, told Arab News that the Bangladeshi central bank should create a safety net for lenders by enhancing its supervision, and “save the NBP-BD from the deep crisis.”

He added: “There are few options which the central bank may consider, like injecting new funds, merging with a solvent bank, or the appointment of an administrator. In the current scenario, NBP should run its operations under the close supervision of the central bank.”

Another Bangladeshi economist, Policy Research Institute’s Executive Director Ahsan H. Mansoor, said the NBP’s situation was extraordinary as defaulted loans are about 10 percent of all loans at banks in the country.

“This is an extraordinary situation that NBP-BD is struggling with around 98 percent defaulted loans,” he said, adding: “There should be an investigation into who these borrowers were and how it took place.”

The NBP-BD’s 2019 annual report revealed that its branches recorded a net loss of Bangladeshi taka (BDT) 664 million ($7.8 million) in 2019, up 60 percent year-on-year (YoY) from a BDT 415 million loss in 2018. 

“The main reasons for this loss were a 20 percent YoY jump in interest expense to BDT 1.6 billion and a whopping increase in total provisioning to BDT 137 million,” Sana Tawfik, banking sector analyst at Karachi-based Arif Habib Limited, told Arab News.

The branches incurred an operating expenditure of BDT 197 million compared to BDT 174 million recorded in the same period last year, marking an increase of 13 percent YoY, which “increased pressure on the bottom-line.”  

Tawfik said: “A turnaround in the overall earnings is dependent upon the successful recovery of loans and advances, increasing business volumes, the success of commercial and strategic initiatives and financial support from concerned stakeholders.”


Taliban deny Pakistani claims of Afghan involvement in attack on Chinese workers

Updated 4 sec ago
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Taliban deny Pakistani claims of Afghan involvement in attack on Chinese workers

  • According to Islamabad, suicide attack that killed 5 Chinese in Pakistan was planned in Afghanistan
  • Afghan Defense Ministry says the March attack showed weakness of Pakistan’s security agencies

KABUL: The Taliban on Wednesday rejected allegations of Afghan involvement in a recent deadly attack on Chinese workers in neighboring Pakistan.

The five Chinese nationals, who were employed on the site of a hydropower project in Dasu in northwestern Khyber Pakhtunkhwa province bordering Afghanistan, were killed alongside their driver in a suicide blast on March 26.

Pakistan’s military said on Tuesday that the attack was planned in Afghanistan and that the suicide bomber was an Afghan citizen.

Maj. Gen. Ahmad Sharif, a spokesperson for Pakistan’s army, also told reporters that Islamabad had “solid evidence” of militants using Afghan soil to launch attacks in Pakistan, that since the beginning of the year such assaults had killed more than 60 security personnel and that authorities in Kabul were unhelpful in addressing the violence.

The Taliban’s Ministry of Defense responded on Wednesday that the claims were “irresponsible and far from the reality.

“Blaming Afghanistan for such incidents is a failed attempt to divert attention from the truth, and we strongly reject it,” Enayatullah Khwarazmi, the ministry’s spokesperson, said in a statement.

“The killing of Chinese citizens in an area of Khyber Pakhtunkhwa, which is under tight security cover of the Pakistani army, shows the weakness of the Pakistani security agencies or cooperation with the attackers.”

The Dasu attack followed two other major assaults in regions where China has invested more than $65 billion in infrastructure projects as part of its wider Belt and Road Initiative.

On March 25, a naval air base was attacked in Turbat in Pakistan’s Balochistan province, and on March 20, militants stormed a government compound in nearby Gwadar district, which is home to a Chinese-operated port.

Pakistan is home to twin insurgencies, one by militants related to the Tehreek-e-Taliban Pakistan — the Pakistani Taliban — and the other by ethnic separatists who seek secession in southwestern Balochistan province, which remains Pakistan’s poorest despite being rich in natural resources.

While the attacks in Balochistan were claimed by the Baloch Liberation Army — the most prominent of several separatist groups in the province, no group claimed responsibility for the one in Dasu.

Blaming it on Afghanistan, however, was “baseless,” according to Naseer Ahmad Nawidy, an international relations professor at Salam University in Kabul.

“The insurgency in the region has existed for very long now and cannot be attributed to a specific area or country. Pakistan looks at the Islamic Emirate in its current form as a threat to its interests. The Pakistan government needs to develop its relations with the Islamic Emirate based on equal rights and goodwill for stability in the whole region,” Nawidy told Arab News.

“Stability in the region requires mutual cooperation and trust. The governments in Afghanistan and Pakistan must end the relations crisis at the earliest. Repeating such claims will further increase the tensions and may cause enmity between the two countries.”

Abdul Saboor Mubariz, a political scientist and lecturer at Alfalah University in Jalalabad, said that Pakistan’s claims were meant to put pressure on the Taliban to help Islamabad in its campaign against the TTP.

“Pakistan’s government is using different forms of pressure such as forcible deportation of Afghan refugees, claims about security threats from Afghanistan, closing border points and creating challenges for Afghan traders,” he said, adding that accusations and claims of links to attacks were affecting the Taliban administration as it still sought recognition from foreign governments.

“The claims are critical for the Islamic Emirate as it is seeking engagement with the countries in the region and across the globe, while the government remains unrecognized by all world countries.”


India PM Modi’s party deletes X post accused of targeting Muslims

Updated 32 min 9 sec ago
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India PM Modi’s party deletes X post accused of targeting Muslims

  • Video featured opposition politicians scheming to abolish programs for marginalized Hindus, distribute them to Muslims
  • India’s PM Modi, expected to win polls, has made controversial remarks in election speeches, referring to Muslims as “infiltrators” 

New Delhi: Indian Prime Minister Narendra Modi’s party on Wednesday deleted a cartoon video posted on social media platform X that was criticized for targeting minority Muslims during an ongoing national election.

India’s election code bans campaigning based on “communal” incitement but the Hindu-nationalist Bharatiya Janata Party (BJP) has frequently invoked the country’s main religious divide on the campaign trail.

The video, posted by an official BJP account, featured caricatures of opposition politicians scheming to abolish special affirmative action programs for marginalized Hindu groups and instead distribute them to Muslims.

The election commission wrote to the platform’s Indian office on Tuesday saying the “objectionable” post violated Indian law.

On Wednesday the original post had disappeared from the platform, with a notice saying it had been deleted.

A police complaint filed by the opposition Congress party accused the video of promoting “enmity between different religions.”

Modi, who is widely expected to win a third term in office when the six-week general election concludes next month, has made similar claims to the video in campaign appearances since last month.

He has used public speeches to refer to Muslims as “infiltrators” and “those who have more children,” prompting condemnation from opposition politicians, who have complained to election authorities.

On Tuesday he again said that his political opponents would “snatch” affirmative action policies meant for disadvantaged Hindus and redirect them to Muslims.

Modi remains widely popular a decade after coming to power, in large part due to his government’s positioning of the nation’s majority faith at the center of its politics, despite India’s officially secular constitution.

That in turn has made India’s 220-million-plus Muslim population increasingly anxious about their future in the country.

The BJP last month published another contentious animated video on Instagram in which a voiceover warned that if the opposition came to power, “it will snatch all the money and wealth from non-Muslims and distribute them among Muslims, their favorite community.”

The video was removed after several users reported it for “hate speech.”


UK says to expel Russian defense attache as ‘undeclared military intelligence officer’

Updated 08 May 2024
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UK says to expel Russian defense attache as ‘undeclared military intelligence officer’

  • Interior minister James Cleverly told parliament the UK would also remove the diplomatic status of several Russian-owned properties
  • UK is currently a staunch NATO backer of Ukraine

London: The UK government on Wednesday raised tensions with the Kremlin by announcing it would expel a Russian defense attache for being “an undeclared military intelligence officer.”
Interior minister James Cleverly told parliament the UK would also remove the diplomatic status of several Russian-owned properties, including one in Sussex, southern England, and another in London “which we believe have been used for intelligence purposes.”
There would also be new restrictions on Russian diplomatic visas such as a cap on the length of time Russian diplomats can spend in the UK, he added.
The move comes with the UK concerned at an apparent increase in “malign” Russian activity on UK soil, including an arson attack on a Ukrainian-linked business allegedly orchestrated by the Kremlin.
A British man who it is claimed has links to the Wagner Group was charged in connection with that case last month.
London has previously accused Moscow of being behind the poisoning of two Russian former agents on UK soil, and of a spate of cyberattacks and disinformation campaigns.
The UK is currently a staunch NATO backer of Ukraine, providing training for troops and military equipment in the fightback against Russia.
Cleverly said the new package of measures was intended “to make clear to Russia that we will not tolerate such apparent escalations.”
He warned that Moscow would make accusations of Russophobia and spread conspiracy theories in response to his announcement.
“This is not new and the British people and the British Government will not fall for it, and will not be taken for fools by (President Vladimir) Putin’s bots, trolls and lackeys.
“Russia’s explanation was totally inadequate. Our response will be resolute and firm.
“Our message to Russia is clear: stop this illegal war, withdraw your troops from Ukraine, cease this malign activity.”


Four arrested for duping young Indian men into fighting for Russia in Ukraine

Updated 08 May 2024
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Four arrested for duping young Indian men into fighting for Russia in Ukraine

  • Families of two Indian men who were killed in the war said that they had gone to Russia expecting to work as ‘helpers’ in the army
  • At least 200 Nepalis are estimated to be serving in the Russian army and about 100 are missing

NEW DELHI: Indian police said four people linked to a network of human traffickers have been arrested on suspicion of luring young men to Russia with the promise of lucrative jobs or university places only to force them to fight in the war in Ukraine.
About 35 Indian men were duped in this manner, the Central Bureau of Investigation (CBI) said in March.
The four Indian nationals arrested were a translator, a person facilitating visa processing and the booking of airline tickets as well as two “main recruiters” for the southern states of Kerala and Tamil Nadu, the CBI said late on Tuesday.
The investigation “is continuing against other accused persons who are part of this international network of human traffickers,” the CBI said.
The families of two Indian men who were killed in the war have told Reuters they had gone to Russia expecting to work as “helpers” in the army.
India’s foreign ministry says each case has been “strongly taken up” with Russia. Moscow has not responded to repeated requests from Reuters for comment.
Other South Asian countries have also warned their citizens against such trafficking networks after multiple cases emerged of people being similarly duped into fighting in the Russian army.
Sri Lanka said on Wednesday that “a number” of its retired war veterans were lured to the Russia-Ukraine war front with the promise of a “handsome salary,” citizenship, and other benefits for serving in the army, none of which were granted.
“A significant number of war veterans have died and sustained injuries on the battlefield,” Sri Lanka’s Defense Ministry said, adding that the law would be “strictly enforced” in the matter.
A retired major and an employment agent have been arrested in this connection.
Nepal, which paused issuing work permits for Russia and Ukraine in January, has said several young unemployed Nepalis had been illegally recruited into the Russian army by agents who charged them hefty sums for visas.
At least 200 Nepalis are estimated to be serving in the Russian army and about 100 are missing, officials have said.
India has refused to condemn Russia over the war, calling instead for dialogue and diplomacy to end the conflict. The two countries have enjoyed a close relationship for decades, trading in items from fighter jets to tea.
India has also increased its purchase of cheap Russian oil since the war, with Moscow emerging as its top oil supplier in the last financial year for the second year in a row.


Police clearing Pro-Palestinian tent encampment at George Washington University, dozens arrested

Updated 08 May 2024
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Police clearing Pro-Palestinian tent encampment at George Washington University, dozens arrested

  • A pro-Palestinian tent encampment was cleared at the University of Chicago on Tuesdday
  • Tensions have continued to ratchet up in standoffs with protesters on campuses across the US

WASHINGTON: Police began to clear a Pro-Palestinian tent encampment at George Washington University early Wednesday and arrested dozens of protesters, hours after dozens left the site and marched to President Ellen Granberg’s home.
Officials at the university in Washington, D.C., had warned of possible suspensions for students engaging in protest activities on University Yard.
“While the university is committed to protecting students’ rights to free expression, the encampment had evolved into an unlawful activity, with participants in direct violation of multiple university policies and city regulations,” the university said in a statement.
Local media had reported that some protesters were pepper sprayed as police stopped them from entering the encampment and nearly 30 people had been arrested, according to community organizers.
In a statement, the District of Columbia’s Metropolitan Police Department said arrests were made for assault on a police officer and unlawful entry, but a number of arrests wasn’t immediately given. The department said it moved to disperse demonstrators because “there has been a gradual escalation in the volatility of the protest.”
Tuesday evening, protesters carrying signs that read, “Free Palestine” and “Hands off Rafah,” marched to Granberg’s home. Police were called to maintain the crowd. No arrests were made.
This comes as Mayor Muriel Bowser and MPD Chief Pamela Smith are set to testify about the District of Columbia’s handling of the protest at a House Committee on Oversight and Accountability hearing on Wednesday afternoon.
A pro-Palestinian tent encampment was cleared at the University of Chicago on Tuesday after administrators who had initially adopted a permissive approach said the protest had crossed a line and caused growing concerns about safety.
University President Paul Alivizatos acknowledged the school’s role as a protector of freedom of speech after officers in riot gear blocked access to the school’s Quad but also took an enough-is-enough stance.
“The university remains a place where dissenting voices have many avenues to express themselves, but we cannot enable an environment where the expression of some dominates and disrupts the healthy functioning of the community for the rest,” Alivizatos wrote in a message to the university community.
Tensions have continued to ratchet up in standoffs with protesters on campuses across the US — and increasingly, in Europe — nearly three weeks into a movement launched by a protest at Columbia University. Some colleges cracked down immediately on protests against the Israel-Hamas war. Among those that have tolerated the tent encampments, some have begun to lose patience and call in police over concerns about disruptions to campus life, safety and the involvement of nonstudents.
Since April 18, just over 2,600 people have been arrested on 50 campuses, figures based on AP reporting and statements from universities and law enforcement agencies.
But not all schools are taking that approach, with some letting protesters hold rallies and organize their encampments as they see fit.
The president of Wesleyan University, a liberal arts school in Connecticut, has commended the on-campus demonstration — which includes a pro-Palestinian tent encampment — as an act of political expression. The camp there has grown from about 20 tents a week ago to more than 100.
“The protesters’ cause is important — bringing attention to the killing of innocent people,” university President Michael Roth wrote to the campus community Thursday. “And we continue to make space for them to do so, as long as that space is not disruptive to campus operations.”
The Rhode Island School of Design, where students started occupying a building Monday, affirms students’ rights to freedom of speech and peaceful assembly and supports all members of the community, a spokesperson said. The school said President Crystal Williams spent more than five hours with the protesters that evening discussing their demands.
On Tuesday the school announced it was relocating classes that were scheduled to take place in the building. It was covered with posters reading “Free Palestine” and “Let Gaza Live,” and dove was drawn in colored chalk on the sidewalk.
Campuses have tried tactics from appeasement to threats of disciplinary action to resolve the protests and clear the way for commencements.
At the University of Chicago, hundreds of protesters gathered for at least eight days until administrators warned them Friday to leave or face removal. On Tuesday, law enforcement dismantled the encampment.
Officers later picked up a barricade erected to keep protesters out of the Quad and moved it toward the demonstrators, some of whom chanted, “Up, up with liberation. Down, down with occupation!” Police and protesters pushed back and forth along the barricade as the officers moved to reestablish control.