Experts and bankers on Saturday said that Alternative Dispute Resolution mechanism could be an important tool to reduce and recover non-performing loans.
At a roundtable discussion organised on ADR in managing the risk of non-performing bank loans, they also stressed necessary policy reforms, amendment of Artho Rin Adalat Ain 2003, effective implementation of law, stern action against the loan defaulters for bringing down the rate of NPLs in the country.
Bangladesh International Arbitration Centre and Dhaka Chamber of Commerce and Industry jointly organised the programme at DCCI auditorium in Dhaka.
Legislative and parliamentary affairs division secretary Mohammad Shahidul Haque said that 2 per cent NPL was allowable in the developed nations where it was over 10 per cent in Bangladesh which was not acceptable.
He said that Financial Institutions Division should come up with proposals of how to address the NPL issues and the government would bring reforms, if needed, to reduce NPL.
BIAC joining in the process of settling commercial disputes beyond the court created a ray of hope, he added.
BIAC chairman Mahbubur Rahman said that effective implementation of law was mandatory to convert NPLs into performing loans.
He said that BIAC along with Bangladesh Bank and Association of Bankers Bangladesh had been working out a draft guideline for the banks which would expedite the process of ADR.
DCCI president Abul Kasem Khan recommended introduction of alternative recovery options like ADR to bring down the rate of NPLs.
BIAC chief executive officer Muhammad A (Rumee) Ali said that there must be a way out before going to the court for realisation of the bad loans and there should be arbitration clause in the contract.
He hoped that ADR would be more and more in practice for mitigating NPLs before going to the courts.
The City Bank Ltd head of legal Shafayat Ullah in his key note presentation emphasised introduction of ADR as an alternative route to overcome the NPL problems.
All organisations should incorporate mediation-arbitration clause in the commercial contracts, he said, adding that ADR could save time and cost.
Midland Bank Limited managing director and chief executive officer Ahsan-uz Zaman, special adviser to the board of trustees of ULAB Professor Imran Rahman, Legislative and Parliamentary Affairs Division additional secretary Nasreen Begum, Bangladesh Women Judges Association president, Labour Appellate Tribunal member, Tanjina Ismail, Financial Institutions Division additional secretary Salma Nasreen, City Bank Limited chief risk officer Md Abdul Wadud, United Commercial Bank Ltd additional managing director Mohammad Mamdud Rashid, head of Special Asset Management Group in Standard Chartered Bank Bangladesh Nur Hossain Al Kaderi and IFIC Bank Limited head of remedial asset management Mir Iqbal Hossain, among others, spoke at the programme.
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