• Tuesday, Oct 20, 2020
  • Last Update : 12:39 am

Stop defending loan defaulters

  • Published at 10:56 pm January 19th, 2020
loan default
Photo: Bigstock

A robust banking sector is the bedrock of any efficient and functional economy

The current financial climate in Bangladesh is nothing if not dire.

Non-performing loans (NPLs) have continued to increase in our country, and it appears that the central bank’s attempts to address this growing problem has been anything but adequate.

Rescheduled loans rose by over 117% in 2019 -- a staggering Tk50,434 crore -- and this strategy is nothing but a ruse to appear to make the ever-growing NPLs look less severe than they are

There is no mistaking this, NPLs continue to be among the biggest problems for our still-growing economy, threatening to destabilize its very foundations, and it appears that we are yet to address this issue with the seriousness it deserves.

The solutions that have so far been proposed by the central bank have all been in favour of the loan defaulters, including giving them the opportunity to regularize their loans for 10 years, including one year’s grace period, at 9% interest rate, by just making 2% down payment.

It is extremely disappointing to see that, rather than hold these individuals accountable for the significant harm they have caused our banking sector, we continue to defend and protect them, rather than bringing them to book.

This highlights the culture of impunity and favouritism that continues to be such a deterrent to our progress; there has to be a time when those responsible say enough is enough.

A robust banking sector is the bedrock of any efficient and functional economy and it is unfortunate that we continue to protect those who are barring us from achieving that.

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