The banks are Pubali Bank, Uttara Bank, National Bank, IFIC Bank, Arab Bangladesh Bank, United Commercial Bank, Bangladesh Commerce Bank and Oriental Bank.

BB Governor Fakhruddin Ahmed advised the bankers at a meeting at the central bank to bring the quantum of their respective gross classified loans down to the level of their respective net classified loans, meeting sources said.

They said the banks having the high non-performing loans (NPLs) agreed to reduce their classified loans by December 2004.

The meeting was told that the banks could easily cut down the quantum of gross default loans through writing off the loans against which there are provisions and interest suspension.

For instance, according to BB figures, Pubali Bank's gross classified credits--25 percent as of June 30, 2004--could be slashed to the level of its net classified loans of 12.22 percent through writing off the bad loans having adequate provisions.

The bankers were apprised at the meeting that they could write off a portion of a loan portfolio against which there is partial provisioning.

BB Deputy Governor Muhammad A (Rumee) Ali, Executive Director Asaduzzaman Khan and General Manager (off-sight supervision) Mohammad Mostafa, chairmen or their representatives and managing directors of the banks were present at the meeting, with the governor in the chair.

The central bank sources said the average gross classified loans of the 49 commercial banks stood at 21 percent, as of June 30, 2004, while the quantum in net terms was 17 percent.

In case of PCBs, the average gross classified loans stood at 11.26 percent on June 30, 2004 while in net terms it was 6.48 percent.

A senior central bank official told UNB that they were expecting to bring the extent of default loans down to the level of around 15 percent from the present 21 percent by the end of this year.