Financial Institutions Division has reminded the Bangladesh Bank and the state-owned banks of its 26 recommendations, including regular disclosure of identity of big loan defaulters for quickening recovery of bad loans.
The division under the finance ministry issued the reminder on July 25 as neither the central bank nor the state-owned banks gave any feedbacks to the division about the actions they took to check widespread loan scams and growing bad loans.
On April 3, the division recommended 26 short-term, medium-term and long-term measures, to be implemented in three months, six months and more than six months, as the defaulted loans of eight state-owned banks, 40 private sector banks and nine foreign banks rose to Tk 74,303 crore in 2017 from Tk 62,172 crore in 2016.
Division secretary Eunusur Rahman told New Age on Saturday that they were forced to issue the reminder as the central bank and the state-owned banks gave no feedback in the past three months.
The division should have already been given with feedbacks on the implementation of the short-term measures, he said.
Among the short term recommendations, the division said that the state-owned banks would publish the identity of the defaulters on their web page, notice boards and any visible place like newspapers so that general people could know them.
It recommended introduction of punishment for failure to recover bad loans and reward for realising bad loans.
BASIC Bank managing director Muhammad Awal Khan, appointed at the crucial post of the scam-ridden state-owned bank in November, told New Age on Saturday that he could make no comments on the issue right now.
He said that he needed to talk with officials concerned before making any statement.
The defaulted loans in the six state-owned banks — Sonali, Janata, Agrani, Rupali, BASIC and Bangladesh Development Bank — increased to Tk 38,517.32 crore as of September 30, 2017 from Tk 34,580 crore as of June 30, 2017, according to Bangladesh Bank statistics.
Of them, BASIC, facing growing bad loan following detection of shady loan extended by the previous board of directors led by controversial chairman Sheikh Abdul Hye Bacchu in 2009-2014, has the highest amount of non-performing loan of Tk 7,599 crore or around 60 per cent of the total advance.
In 2014, BASIC’s nonperforming loan stood at over Tk 4,157 crore, or 36.55 per cent of the total advance.
Bangladesh Bank deputy governor Abu Hena Mohd Razee Hassan, however, showed reservation about the disclosure of identity of big loan defaulters by the state-owned banks.
Certain criteria of the central bank have to be maintained by the banks in disclosing the identity of loan defaulters, he said.
Former central bank deputy governor Ibrahim Khaled alleged that the central bank never enforced the provision for publication of identity of defaulted borrowers stipulated in the Bank Company Act 1991.
He said that the constitution of a separate High Court bench for speedy disposal of cases against loan recovery had long been due, but the law ministry continued rejecting the proposal.
Recovery of credit of Tk 45,135 crore by state-owned banks remained blocked for decades because of 4,250 writ petitions filed by the borrowers against cases filed by state-owned Sonali, Agrani, Janata and Rupali banks until 2016.
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