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
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.
