But its objectives must be clearly defined and regularly scrutinised
The Bangladesh Bank instructed state-run Sonali Bank to classify the Tk 106 crore loans taken by Orion Infrastructure Ltd as defaulted since the client repeatedly failed to repay on time.
Loans amounting to nearly $600 million, or Tk 7,000 crore, disbursed from the Export Development Fund (EDF), which was formed based on the country’s foreign exchange reserves, have been defaulted, according to a Bangladesh Bank (BB) document.
Dhaka-based firms defaulted most of the amount at $558.7 million and Chattogram-based ones $29.7 million
There are many hurdles to overcome in the coming days
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
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.
An unholy nexus of powerful people are protecting those who've stolen thousands of crores.
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.
