• Monday, Jan 20, 2020
  • Last Update : 04:05 pm

NPL affecting entire economy, says DCCI chief

  • Published at 11:08 pm October 19th, 2019
Guests attend a seminar on restructuring and liquidation of financial institutions in the capital Courtesy

Taseer came up with the remarks while addressing a seminar titled ‘Restructuring & Liquidation of Financial Institutions and Impact on Stakeholders’ at DCCI office in the capital

Dhaka Chamber of Commerce and Industry (DCCI) President Osama Taseer on Saturday said non-performing loans (NPL) were having bad impact on the entire economy. 

“The high NPL affects the financial sector as well as the entire economy through slow credit recycling, pushing the liquidity shortage and impacting the creditworthiness of overall banking sector,” he said. 

Taseer came up with the remarks while addressing a seminar titled ‘Restructuring & Liquidation of Financial Institutions and Impact on Stakeholders’ at DCCI office in the capital. 

Prime Minister's Economic Affairs Adviser Mashiur Rahman, IDLC Finance Managing Director Arif Khan and former City Bank managing director Sohail RK Hossain were present in the program, among others. 

The DCCI president said some banks and financial institutions were facing crisis, despite remarkable improvement in the financial sector.

He mentioned weak corporate governance, inefficient loan disbursement and concentration on large borrowers as the reasons.

Taseer urged the government to form a separate body to fix the underperforming financial institutes. 

In order to cut down non-performing loan, IDLC Finance MD Arif Khan stressed good governance, strong monitoring by the Central Bank and ensuring penalty for the wrong-doers. 

Besides, banks should not go for long-term lending as it took deposit for short terms, he suggested.

On stock market, PM’s Economic Affairs Adviser Mashiur Rahman said capital market had few good companies, which should not be the case.

Calling on large companies for floating shares in the stock market, he suggested some policy reformations and modernization of regulatory authorities for a strong financial market.

Besides, he urged the financial institutions to conduct internal as well as external audit in a transparent manner on a regular basis.

Senior Vice President of DCCI Waqar Ahmad Choudhury, Vice President Imran Ahmed, DCCI directors and stakeholders from different organizations took part in the program.

NPL situation 

Non-performing loans (NPLs) of banks rose by a staggering Tk1,551 crore in three months till June this year, taking the amount of stress loan in the banking sector to Tk112,425 crore. 

As of June, the total bad loans accounted for 11.69% of the total disbursed loans of Tk9,62,077.26 crore, according to the latest Bangladesh Bank (BB) data.

However, the actual size of bad loans was more than double the officially recognized figure, said a recent report of the International Monetary Fund (IMF).

On the other hand, civil society organization Shushashoner Jonno Nagorik (Shujan), claiming the actual amount of defaulted loan to be now about Tk3 lakh crore, said the government and other agencies concerned underestimated the figure.