Special audit in banks on bad loans soon: finance minister

Staff Correspondent | Published: 00:00, Feb 07,2019


Finance minister AHM Mustafa Kamal speaks at the annual meeting of state-owned Rupali Bank at the Krishibid Institution Bangladesh in Dhaka on Wednesday. Bangladesh Bank governor Fazle Kabir and Ruapli Bank chairman Monzur Hossain were also present, among others. — New Age photo

Finance minister AHM Mustafa Kamal on Wednesday said that a special audit would be launched in banks to probe information about the borrowers and their loans.
Three audit firms would be appointed for the purpose, he said while addressing the annual meeting of the state-owned Rupali Bank at the city’s Krishibid Institution.
Kamal also said that the audit would not be aimed at harassing the borrowers.
‘We wanted to know the truth behind all irregularities in the country’s banking sector,’ he noted.
BB governor Fazle Kabir and additional secretary of the Financial Institutions Division were present at the meeting presided by Ruapli Bank chairman Monzur Hossain.
Mustafa Kamal said the audit firms would be selected after consulting with the Bangladesh Bank and Financial Institutions Division.
He said loan defaulters should be considered offenders for their failure in utilising the loans and paying back debts in time.
He warned that the dishonest businessmen would not get any sympathy so as the bankers.
Tough measure would be taken against both the dishonest businessmen and corrupt bankers, he warned.
Fazle Kabir asked the officials of the Rupali Bank Limited to make further efforts to bring the classified loan to a tolerable level and earn more profit.
On January 9, Mustafa Kamal directed the FID officials to appoint a committee for amending Bank Company Act, 1991 to bolster the bad loan recovery process.
He also announced appointing a taskforce oversee the bad loan recovery.
But the taskforce is yet to be appointed while the Financial Institutions Division officials said they preferred amending Artha Rin Adalat Ain 2003 to Bank Company Act 1991 to stem swelling defaulted loans.
The officials find that scopes for checking defaulted loan by amending Artha Rin Adalat Ain 2003, also known as Money Loan Court Act 2003, are higher than by bringing about changes in the Bank Company Act 1991.
The present government has been facing serious criticism for its failure to check the high growth of bad loans that stood at Tk 99,370 crore until September 2018.
The amount is 11.48 per cent of Tk 8,65,930 crore outstanding loans in the country’s banking system and much higher than bad loans of 2 per cent in Nepal and 7 per cent in India.
The defaulted loans in six state-owned commercial banks — Sonali, Agrani, Janata, Rupali, BASIC and Bangladesh Development — stood at Tk 48,080 crore or about 48 per cent of the bad loans.
In July, Federation of Bangladesh Chambers of Commerce and Industry demanded a highly skilled task force to address the problem of non-performing loans in the banking sector.
Earlier in April 2018, Financial Institutions Division recommended five measures, including regular disclosure of identity of big loan defaulters, establishment of cells in the central bank to monitor defaulted loans of over Tk 100 crore and constitution of a separate High Court bench for speedy disposal of writs on loan recovery.
But most of the recommendations are yet to be implemented.

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