• Tuesday, Feb 25, 2020
  • Last Update : 02:57 pm

Bad loans cannot continue

  • Published at 12:03 am December 31st, 2019
loan default
Photo: Bigstock

This cannot be the reality of our banking sector moving forward into the new year

As Bangladesh steps into the new decade this 2020, it is extremely unfortunate that, when it comes to the issue of dealing with bad loans, we have only regressed instead of making any progress.

Make no mistake about it; Bangladesh’s growth rate and development trajectory are undoubtedly impressive and both the public and private sectors deserve the plaudits they have been receiving throughout the decade.

However, with bad loans rising by an estimated Tk22,376.91 crore from January to September this year -- according to data from Bangladesh Bank -- what is undeniable is that the administration has woefully failed to address this most persistent of problems within our economy.

Despite promises and reassurances earlier this year by the authorities concerned that there would be no further increase in the total amount of bad loans, there seems to be no evidence that these reassurances were anything but empty words, as bad loans in the country were the highest in history when last calculated in September.

What it ultimately narrows down to, as with most problems in our country, is the culture of impunity that is embedded within each and every one of our sectors, one that we must desperately address and remedy.

Additionally, the negligence and leniency shown by the authorities -- in particular the central bank -- towards those who have defaulted on their loans have, rather than detract and discourage defaulters, only encouraged them.

This cannot be the reality of our banking sector moving forward into the new year.

A robust and functioning banking sector is paramount to the development of any nation. If we are serious about our ambitions as a nation, this culture of bad loans cannot be allowed to continue.