Govt should recover default loans: Economists

Jannatul Islam

23 June, 2019 12:00 AM printer

Economists have lauded the government’s move to disclose the names of loan defaulters in parliament but expressed concern over the slow recovery of loans due to lack of efficiency in the money courts.

Finance Minister Mustafa Kamal unveiled a list of 300 defaulters in parliament on Saturday in reply to a question from a lawmaker.

Former Bangladesh Bank Governor Saleh Uddin Ahmed said the initiative will help improve good governance in the financial sector, however, authorities should maintain a zero-tolerance policy in the investigation process.

“We have seen finance minister disclosing the names of loan defaulters. The regulators now should take legal action against the loan defaulters,” Prof Saleh Uddin told the Daily Sun.

He also recommended for allocating a day each week for prosecuting financial cases at both district courts and high court division to strengthen the Artha Rin Adalat.

State-run Agrani Bank Chairman Zaid Bakht said by disclosing the names of loan defaulters has been a gesture of good governance in the banking sector.

“Firstly, the authorities should give a chance to defaulters to clear their loans. But proper legal action should be taken against the willful defaulters,” Zaid Bakht told the daily sun.

The volume of default loans increased to Tk 1.1 lakh crore from Tk 23,000 crore in the last 10 years.

The sum of non-performing loans (NPL) stood at Tk 93,911 crore at the end of 2018, up from Tk 74,303 crore a year ago, according to Bangladesh Bank data.

They accounted for 10.3 per cent of the banking sector’s total loans, up from 9.3 per cent in 2017.