Thirteen banks--seven foreign and six local--are performing outstandingly at present with a non-performing loan (NPL) ratio of less than 3 per cent when the sectoral ratio goes past 8 per cent.

These 13 with their good corporate governance and due diligence in banking activities have played a vital role in keeping the sectoral ratio to below the level of 10 per cent.

The seven foreign banks are State Bank of India, Standard Chartered Bangladesh, HSBC, Citibank NA, Bank Alfalah Bangladesh, Woori Bank, Commercial Bank of Ceylon.

Here, State Bank of India has the lowest NPL ratio of 0.35 per cent.

Two old private banks--Eastern Bank and Pubali Bank--are in the group with four new ones such as Midland Bank, Bengal Commercial Bank and Modhumoti Bank and Community Bank.

Eastern Bank was successful in keeping the NPL ratio to below 3 per cent as it follows some principles in the lending process, said Ali Reza Iftekhar, managing director and CEO of Eastern Bank.

The bank is very much choosy in case of the selection of the borrowers so that no wilful defaulter can take loan, he said.

EBL's NPL ratio is 2.78 per cent of its loans, which is one of the lowest in private commercial banks in Bangladesh.

In the loan approval process, it gives a loan after analysing the potential and challenges of the businesses of the borrowers rigorously, Iftekhar said.

"The bank has a huge specialised manpower to monitor the customers' factory, business, financial reports etc, so we get the signals very early."

If any loan becomes classified, EBL then emphasises on the recovery process, said Iftekhar, who is also the former chairman of the Association of Bankers, Bangladesh.

"Any entrepreneur can fall into losses. We normally stand beside them. Sometimes refinance and do the debt management on behalf of the clients and give them time to repay loans so that they can rebuild their business."

However, making a loss in the business is certainly not the reason of creating an NPL all the time, he added.