Bangladesh Bank is opposing issuing trade licences and registration of cars and properties to wilful loan defaulters in the draft bill seeking amendment to the bank company act 1991.
The wilful defaulters should also be barred from traveling abroad in business class and their identities be made public, says the draft amendment bill.
The BB also wants that the ministries and the divisions to debar wilful defaulters from attending state functions or getting state honours.
Former Financial Institutions Division secretary Eunusur Rahman told New Age on Monday that it was a welcome initiative of the BB.
He, however, expressed doubts that the government would accept the key amendments proposed by the BB as many wilful defaulters were ‘politically powerful’.
But he is in favour of doing something to check the growth of default loans as they had crippled the banking sector as well as the economy.
Default loans soared to Tk 1,12,425 crore or 11.69 per cent of Tk 6,92,077.26 crore extended as loans by the banks until September 2019.
The government has provided the opportunity to reschedule bad loans at two per cent down payment since May although the move drew sharp criticism from economists as an ‘artificial arrangement to contain bad loans.
Economists are demanding effective steps to recover bad loans from all the wilful defaulters.
In the draft amendment bill, BB defined wilful defaulters and proposed 50 new provisions to plug loopholes in the law that creates errant borrowers as the governments wants.
It defined wilful defaulters as the borrowers who do not maintain repayment schedules despite their financial solvency.
Besides, borrowers indulging in fraudulence to obtain loans, changing the purposes of loan use and transferring mortgages without informing the lending banks were also called wilful defaulters.
In the draft bill BB wants to publicize wilful defaulters with their photos on the websites and in newspapers.
Until now, none knows how many borrowers are wilful defaulters.
In January, finance minister AHM Mustafa Kamal informed Parliament that 8,238 borrowers defaulted in repaying Tk 96,986.38 crore they had borrowed from banks and financial institutions, known as Non-Bank Financial Institutions until November 2019.
The finance minister also informed Parliament that directors of banks took loans amounting to Tk 173,230.89 crore from their own and other banks until September 2019, which is 12 per cent of the total outstanding loans.
Directors of 25 banks borrowed Tk 1,614.77 crore from their banks -- around 0.166 per cent of the outstanding loans of the banks, he informed Parliament.
The BB in its draft bill wants amendment to the provision that would not allow directors to retain more than 10 per cent shares for two years.
In 2018, the FID had made more than two dozens of recommendations, including regular disclosure of identity of big loan defaulters; introduction of punishment for failure to recover bad loans and reward for realising bad loans; quarterly review of performance-based indicators; opening a separate cell in BB to monitor the borrowers with bad loans exceeding Tk 100 crore and establishment of a separate bench for speedy disposal of writ petitions against loan recovery.
None of the FID proposals were accepted by the banks.
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