Of the total amount, the central bank has set a Tk 454 crore target for Sonali Bank, including Tk 154 crore from its top 20 defaulters and a Tk 268 crore for Agrani Bank with Tk 18 crore from its top 20 defaulters, sources said.

The target for Janata Bank has been set at Tk 175 crore including Tk 25 crore from its top 20 defaulters and for Rupali Bank at Tk 95 crore with Tk 35 crore from its top 20 defaulters.

The central bank first signed a memorandum of understanding (MoU) with the NCBs for one year to improve their performance back in 2003 and extended it in 2004.

The MoU also asked the banks to reduce their default loans and recover, especially from the top 20 defaulters. The NCBs failed to reduce their operating expenses and control credit growth as per the MoU.

The banks, however, made some progress in increasing the recovery of default loans but could not make any major breakthroughs as the government itself represents 50 percent of the top loan defaulters.

According to the MoU signed again this year, bad loan recovery cell will be set up at the regional levels and recovery target will be set for each cell. Credit flow will be restricted to saturated sectors and operating expenses for 2005 will be reduced by five percent from the level of 2004.

Growth of total outstanding loans and advances in 2005 will be limited to five percent of the outstanding amount and it will be inclusive of loan write off. In order to avoid concentration of large loans, the bank's exposure to a single client or group will not exceed five percent of the bank's paid-up capital, according to the MoU.

But these will not be applicable to the cases of the funded and non-funded facilities favouring government organisations against which government guarantees exist and loans extended under agricultural credit targets fixed by the government for the banks and loans given to the non-bank financial institutions (NBFIs) licensed by the BB.

Rupali Bank has a total of Tk 772 crore default loan and top defaulters earlier owed it Tk 551 crore. It succeeded in recovering only Tk 2.78 crore from these top defaulters and Tk 56 crore from the rest of the defaulters.

Bank sources said out of the Tk 551 crore due from the top defaulters, Tk 277 crore is held by different government entities and the government is not paying it.

Janata Bank has a total of Tk 2,199 crore default loan, of which top defaulters are holding Tk 513 crore. The bank recovered Tk 9.31 crore from the top ones and regularised Tk 128 crore of their loan. The bank recovered Tk 184 crore from general defaulters.

Agrani Bank has Tk 2,692 crore default loan, of which top defaulters held Tk 638 crore. The bank recovered Tk 102 crore from the top ones.

Sonali Bank has Tk 4,958 crore default loan with top defaulters holding Tk 1,555 crore. The bank could recover only Tk 41 lakh from the top ones.