Fines should be waived to help offset financial losses

A single group can give rise to several groups. Their ownership structures may differ, and the directors of each group may also be different. The number of directors may vary. One group may have three directors, while another may also have three. One of them may also be a common director in another group.

Because of such commonalities, the previous law stipulated that the entire group would be classified as a defaulter. The whole group would be kept closed. While recovering loans should certainly be one of our objectives, we also need to ensure that businesses do not have to shut down. We must also ensure that businesses are not harmed because of legal technicalities.

Unfortunately, in my view, the interim government did not look at these problems from the right perspective. As a result, the current government has had to deal with these problems. It has had to face all these complications over the past six months. The current government has repealed the interim government’s ‘single borrower exposure’ directive, which had caused losses by treating different groups as a single group and declaring them a single entity simply because they had the same name. That is a positive step. However, consideration should also be given to how the losses caused as a result can be compensated and whether some form of relief can be provided to those affected.

They have faced various types of penalties and financial losses, and this needs to be taken into account. The government has already undertaken a scheme to reopen various closed factories. Keeping job creation and economic dynamism in mind, the government should provide policy support to businesses that have suffered various penalties and financial losses after becoming caught up in a web of rules and regulations.

The policy support could, first of all, include waiving the penalties imposed on the affected groups. The extent of such relief, if any, should be determined after a review. Their cases could be analysed individually to determine how they can operate their businesses more effectively. This should be decided after further discussion. But the policy principle should be that they need to be supported.

The economy needs to be accelerated at this point. We are going through a difficult period. At such a time, we need to ensure that businesses do not shut down. The government has already taken a good initiative to reopen closed factories. In line with that initiative, special attention should be given to factories that tried to resume operations but have been unable to do so and remain stuck for various reasons.

The writer is the administrator of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI)