The central bank yesterday cautioned nine new banks over aggressive lending and rising nonperforming loans.

Bangladesh Bank Governor Fazle Kabir chaired the meeting attended by the chief executives of these banks, which came into the market in 2013.

"We have asked these banks to strictly follow the risk management guidelines to improve their performance," said Abu Hena Mohammad Razee Hassan, deputy governor of BB.

The loans of these nine banks are concentrated on the textile and garment sector in Dhaka and Chittagong, which need to be diversified, he added.

"Also, these banks have been asked to reduce their NPL."

The NPL of the nine banks, referred to as the fourth generation lenders, increased by over 43 percent to Tk 561 crore at the end of September, from Tk 392 crore three months ago. At the end of December last year, the NPL of these banks was less than Tk 45 crore.

Furthermore, the NPL of two new banks has grown significantly in recent months -- it was 7.24 percent for Farmers Bank and 4.14 percent for NRB Commercial -- in the July-September quarter, according to an official of the central bank.

The NPL for the banking industry overall reached 10.34 percent in September, up from 10.06 percent a quarter ago; it was around 25 percent for the four state banks.

"Bangladesh Bank has asked us to be compliant about NPL," Nurul Amin, managing director of Meghna Bank, told The Daily Star after the meeting. The bank's NPL had crossed 3 percent in the same time.

Amin said his bank's NPL would go down at the end of this year. The chief executives of these banks also made some recommendations to improve their performance, including setting up new branches at a 2:1 ratio in the urban and rural areas and relaxation of farm loans.

At present, a bank has to open a branch a rural area against one in an urban area.  On agriculture loans, the top executives said they struggle to meet the target as their branch network is still inadequate.