Bangladesh Bank governor, Law minister and bankers are slated to hold a discussion with the judges of the High Court to discuss the prevailing bad loan situation in the country for the better understanding of the judges.
Association of Bankers, Bangladesh chairman Syed Mahbubur Rahman told reporters after a multiparty meeting among the central bank, Law Commission, Bangladesh International Arbitration Centre and top executives of all the scheduled banks at the central bank headquarters to address the legal barriers in the recovery of defaulted loan.
Started at 3:00pm on the day, the meeting continued around 6:30pm where suggestions like creating social awareness regarding the defaulters, humiliating the defaulters, barring them from different citizen services along with legal reforms were discussed.
At the meeting, the central bank governor Fazle Kabir, deputy governors SM Moniruzzaman and Ahmed Jamal, and Law Commission chairman Justice ABM Khairul Haque, among others, were present.
In Bangladesh, the amount of bad loans, also known as non-performing loans, is Tk Tk 99,370 crore or 11.48 per cent of the total outstanding loans of Tk 8,65,930 crore, while it is 2 per cent in Nepal and below 7 per cent in India.
‘The meeting discussed how interest of the depositors could be protected by bringing the defaulters to book,’ Rahman said.
Speaking about the practice of the defaulters of filing writ petition to skip loan payment, Association of Bankers, Bangladesh chairman said, ‘We discussed whether a meeting could be organised with the judges of the High Court to discuss the issue in the presence of central bank governor, law minister and bankers.’
Although filing a writ petition is the fundamental right of the defaulters, it is also the rights of the depositors to get back the money that has become defaulted and also the rights of the banks’ sponsors to get their investments back, he said.
Such meetings could be organised every year to give judges input regarding the ongoing situation in the banking sector, the Association of Bankers chairman said.
Besides, proposals like ‘name and shame’ were also discussed at the meeting as many of the countries follow such technique in addressing the non-performing loan problem, he said.
China, Nepal, Malaysia and Singapore followed different procedures like barring passport renewal of the defaulters so that the defaulters feel the urge to repay their outstanding loans, said Rahman, also the managing director of Dhaka Bank.
Besides the moves, legal reform is also required in the existing acts like Artha Rin Adalat Ain and Bankruptcy Act, 1997.
After the meeting, Bangladesh Bank spokesperson Md Serajul Islam said, ‘It was to discuss how we all could be benefited by expediting non-performing loan recovery.’
If required, initiative to make legal reforms would be considered based on the discussion, he said.
Bankers at the meeting informed about the issue of willful defaulters who use to file writ petitions with the court to get stay orders for skipping loan payments, he said.
Want stories like this in your inbox?
Sign up to exclusive daily email
More Stories from Banking