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The National Board of Revenue (NBR) suffered a revenue loss of Tk 4.03 billion in 2004 from the country's banking sector due to provisioning requirement against classified loans, official sources said.
"The annual profits of banks suffer because of the provisioning requirement against non-performing loans. This, in turn, affects the earning of the NBR" a Board high official told FE Saturday.
Sources at the Bangladesh Bank (BB) said the net classified loans of country's 49 public, private and specialised banks were at Tk 94.95 billion until December 31, 2004, which accounts for 9.79 per cent of the total outstanding loans.
The size of the default loans in the banking sector would be much more if the segregated amount and suspended interests are added to the total bad debts, a bank official said.
The BB sources said all the banks have a total of Tk 51.18 billion provisioning shortfall until December 31 last, including Tk 47.26 billion of the NCBs.
The default loan of the NCBs was estimated at Tk 62.62 billion or 17.26 per cent of their total loans as of December 31 last while that of specialised banks Tk 17.75 billion or 22.97 per cent of their total loan portfolio.
From the next fiscal year, banks would have to pay corporate tax even on the amount provisioned against classified loans, sources said.
This would help enhance revenue earning of the NBR.
The Bangladesh Association of Banks (BAB) recently demanded continuation of the tax exemption granted to the amount provisioned for some more years.
When asked, an NBR official said the government has to generate more resources form the banking sector.
"If the exemption continues for some more years the government will have to face hurdles in mobilising adequate resources," the official added.
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