• Saturday, Jul 11, 2020
  • Last Update : 02:17 am

It’s time to stop coddling defaulters

  • Published at 12:03 am May 23rd, 2019

No economy can progress without a robust financial sector

T\here is no doubt that the banking sector in Bangladesh is going through a crisis, with staggeringly high loan default rates that seem to just keep on rising.

The High Court’s order to halt the Bangladesh Bank circular that granted a waiver to defaulters is a laudable move, which reinforces the faith that there are checks and balances in place within the country’s framework.

The circular, which allowed defaulters to regularize their bad loans by paying a 2% down payment only, drew sharp criticism from experts and rightly so, who commented that not only would it show the entire banking sector in a bad light, but also increase the number of willful defaulters and discourage future borrowers from repaying loans.

As of March this year, of the total amount of defaulting loans, more than half were owned by state-owned banks, indicating the widespread nature of the problem within the sector mired by corruption, nepotism, favouritism, political interference, and an overall culture of impunity. 

In showing a preference towards the defaulters -- who continue to cripple our economy and threaten to halt its development trajectory -- the focus is once again on the negligence of banks; our central bank surely, is also culpable for failing to address the issue over the years.

 While the High Court’s order is a good first step, more needs to be done. The High Court ordering Bangladesh Bank to submit a list of borrowers with over Tk1 crore in loan defaults is also good news, and the bank must comply.

No economy can progress without a robust financial sector, and for too long, ours has been nearly crippled by a culture of bad loans -- it is about time we fixed it.

blogger sharing button blogger
buffer sharing button buffer
diaspora sharing button diaspora
digg sharing button digg
douban sharing button douban
email sharing button email
evernote sharing button evernote
flipboard sharing button flipboard
pocket sharing button getpocket
github sharing button github
gmail sharing button gmail
googlebookmarks sharing button googlebookmarks
hackernews sharing button hackernews
instapaper sharing button instapaper
line sharing button line
linkedin sharing button linkedin
livejournal sharing button livejournal
mailru sharing button mailru
medium sharing button medium
meneame sharing button meneame
messenger sharing button messenger
odnoklassniki sharing button odnoklassniki
pinterest sharing button pinterest
print sharing button print
qzone sharing button qzone
reddit sharing button reddit
refind sharing button refind
renren sharing button renren
skype sharing button skype
snapchat sharing button snapchat
surfingbird sharing button surfingbird
telegram sharing button telegram
tumblr sharing button tumblr
twitter sharing button twitter
vk sharing button vk
wechat sharing button wechat
weibo sharing button weibo
whatsapp sharing button whatsapp
wordpress sharing button wordpress
xing sharing button xing
yahoomail sharing button yahoomail