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State-run banks to disclose list of top loan defaulters through newspapers

  • Published at 12:49 am October 10th, 2017
  • Last updated at 10:15 am October 10th, 2017
State-run banks to disclose list of top loan defaulters through newspapers
The eight state-owned banks are considering revealing the names of top loan defaulters by publishing advertisements in daily newspapers, in order to check the upward trend of default loans. This is just one of the recommendations which are to be finalised by the Financial Institutions Division in a meeting on Tuesday. A total 63 recommendations to revive the state-run banks were proposed in a workshop held at Dhaka’s CIRDAP auditorium last month, titled “How to Meet the Challenges of State-Owned Banks.” Finance Minister AMA Muhith attended the workshop, which was organised by the Banking Division of the finance ministry. Banking division Secretary Md Eunusur Rahman told the Dhaka Tribune: “We will finalise the recommendations in Tuesday’s meeting, in a bid to resolve several problems that have been plaguing the state-owned banks.” “Several members of parliament engaged in a heated debate during a recent parliamentary session, over the publishing of the names of defaulters. As such, there has been some uncertainty regarding this issue,” he added. The secretary also said that they have been trying their best to incorporate all of the major recommendations. The recommendations also include calls to reduce the number of stages for loan approval in state-run banks. The banking division has also been mulling the provision of more authority to bank officials at all levels, so that they can execute instant decisions to take required action against loan defaulters and written off loans. Moreover, the technological capacity in remote branches of state-run banks will be increased for smooth operation. The state-owned bank authority will reward regular borrowers and take legal action against loan defaulters, one of the recommendations read. Default loans at state-owned banks accounts for 27% of total default loans in Bangladesh's banking sector. Earlier in September this year, participants at a conference organised by the banking division raised questions about the activities of the managing directors of state-run banks, who draw monthly salaries of Tk4 lakh but do not take any stern action against those who default on loans. The government has disbursed a total of Tk9,639cr to meet the capital shortfall in the eight state-owned banks in the last four years. The majority of this amount was channeled to Sonali and Basic bank. The top 20 loan defaulters with state-run banks are the clients of Sonali Bank.