Punish wilful defaulters before banks’ health further deteriorates
Defaulting on loans is progressively becoming part of the business model to stay competitive, said Rehman Sobhan, chairman of the Centre for Policy Dialogue.
Otherwise, banking sector health will continue to deteriorate
The growth of bad loans is mainly due to the business-politics nexus, lack of corporate governance, and weak judicial system
Relaxing loan repayment is unlikely to work if habitual defaulters continue to be tolerated
Time for govt to change its policy towards habitual defaulters
Bangladesh’s banking sector has the second-highest ratio of non-performing loans (NPL) among the countries in South Asia as lenders continue to face multiple challenges emanating from scams, a lack of corporate governance and borrowers’ growing reluctance to make instalments regularly.
'Lunthito Bhabishyat: Bangladesher Arthanoitik Shonkoter Chalchitra' gives an overview of Bangladesh's current economic crisis.
Several farmers, accused of defaulting on loans in Pabna, have said they became victims of fraudulent activities when they took the loans from Bangladesh Samabaya Bank.
Fighting tax evasion, preventing trade-based illicit financial outflows and ending the culture of money laundering and loan defaults is a much more sustainable solution to adding to foreign exchange reserves than taking foreign loans on interest.
The Bangladesh Bank today revised its policy for post import financing (PIF) in order to give clarification to banks as importers have faced complexities to get fund properly.
The government seems to lack the will to arrest bad loans and restore corporate governance in the banking sector with the habitual defaulters working the system, analysts said.
State-run Janata Bank’s provisioning shortfall has hit a whopping Tk 8,256 crore, the highest-ever deficit for any bank in the country, putting depositors’ money at risk.
Bangladesh Bank and a government committee have come up with a generous scheme to allow easy rescheduling of defaulted loans, which experts say will hurt the banking sector and the economy at large.
The new finance minister, Mustafa Kamal, has vowed to address the longstanding concerns regarding increasing non-performing loans in banks. Khondkar Ibrahim Khaled, a noted banker and former deputy governor of Bangladesh Bank, talks to The Daily Star's Nazmul Ahasan about the issue.