Kamal unveils list of top 20 defaulters

Finance Minister AHM Mustafa Kamal yesterday disclosed the names of the top 20 defaulters who together account for Tk 16,588 crore of soured loans.

As of September last year, the total defaulted loans in the banking sector stood at Tk 134,396 crore, which is the highest yet, according to data from the Bangladesh Bank. That is 12.3 percent of all outstanding loans.

Kamal placed the list of the top 20 loan defaulters in parliament in a scripted response to a query from ruling Awami League MP Shahiduzzaman Sarker.

CLC Power Company tops the list of defaulters with its bad loan of Tk 1,649 crore, followed by Western Marine Shipyard (Tk 1,529 crore), Remex Footwear (Tk 1,077 crore), Rising Steel Company (Tk 990 crore) and Mohammad Elias Brothers (Tk 965 crore).

Rupali Composite Leather Wire, Crescent Leathers Products, Quantum Power Systems, Saad Musa Fabrics, BR Spinning Mills, SA Oil Refinery, Maisha Property Development, Radium Composite Textile, Samannaz Super Oil, Manha Precast Technology, Asian Education, SM Steel Re-Rolling Mills, Apollo Steel Complex, Ehsan Steel Re-Rolling and Siddiqui Traders are the other big defaulters.

Kamal said the total number of defaulters in Bangladesh is 786,065.

The idea of publishing such a list of defaulters is good as they will be punished socially due to the disclosure, said  Zahid Hussain, a former lead economist of the World Bank's Dhaka office.

"But the names of notorious habitual defaulters were absent from the list, so it has raised a question," he said.

The disclosure has not reflected the actual scenario of the defaulted loans, said Ahsan H Mansur, executive director of the Policy Research Institute.

"I think those who might have faced closure of their businesses were revealed by the finance minister in parliament."

The politically-backed defaulters have rescheduled their defaulted loans under a central bank's relaxed rescheduling facility just before the pandemic, he said.

In May 2019, the central bank allowed defaulters to reschedule their classified loans by making a down payment of only 2 percent instead of 10-50 percent.

Besides, the tenure for repayment was 10 years with a grace period of one year.

The central bank also allowed all borrowers in banks to avoid the default zone in 2020 even if they did not pay any instalment of their loans throughout the year.

Borrowers enjoyed the relaxed repayment facility until last year as the central bank allowed them to avoid being classified as a defaulter if they cleared 50 percent of their instalments payable in the final quarter of 2022.

"The habitual defaulters have bagged the advantages of the relaxed policies to avoid the default zone. But they should not be allowed to do so," said Mansur, also a former official of the International Monetary Fund.

He suggested the government take strict measures against the defaulters to bring back discipline in the banking sector.

The relaxed rescheduling and loan repayment facilities have facilitated the delinquent borrowers to avoid the list, said Salehuddin Ahmed, a former BB governor.

He recommended the central bank take action against all defaulters to recover the classified loans.