Bangladesh Bank is backing down again after various threats regarding defaulted loans. For that reason, the decision that the loan will be defaulted after 90 days has been planned to be implemented from July instead of next April. A committee of seven members has been formed to implement the new plan. If the new plan of the central bank is implemented, the big groups like S Alam, Beximco Group, JMI, Nabil Group will get additional opportunities, the concerned people think.
Basically, the Central Bank withdrew from the implementation of the new definition of default after receiving the written instructions of the Ministry of Finance. However, additional time is being taken in rescheduling the debt for the purpose of recovery. At the same time, the seven-member committee is working to increase the amount of one-time payment (dyne payment) for debt rescheduling.
Under the pressure of the International Monetary Fund, Bangladesh Bank decided to categorize defaulted loans according to international standards. Accordingly, a notification was issued in the last week of November to default the loan for more than 90 days. It was supposed to be effective from next April. However, in less than two months, the central bank changed its decision.
When asked, Bangladesh Bank's spokesperson and executive director Husne Ara Shikha said, 'Bangladesh Bank has given strict instructions to commercial banks to recover bad debts. There are no plans to show defaults. For this, a new notification on loan default has been issued, which is to be implemented from April 1. However, for the sake of recovery of dues, work is going on with the rescheduling of loans. If the final decision is taken, it will be communicated to the media in time.
On November 28, Bangladesh Bank announced in a notification that the central bank is again going to start international practice in determining the quality of bank loans. If a loan is not repaid within the specified time period, it will be considered overdue. After that, if the loan exceeds 90 days as non-payment, it will be defaulted.
Salim RF Hossain, Chairman of Association of Bankers Bangladesh Limited, the organization of chief executives of the bank, said, 'The default of the loan has already happened. There is no point in sweeping it under the carpet. Banks have started working to increase collection. However, if the governor extends the time by two months for any major interest, there will be no negative impact.
The data of Bangladesh Bank says that at the end of last September, defaulted loans in the country's banks have increased by Tk 2 lakh 84 thousand 977 crores. About 17 percent of the loans disbursed by banks are currently defaulted. The IMF has recommended bringing down non-performing loans below 10 percent, 10 percent for public sector banks and 5 percent for private banks. Currently, dozens of banks default between 45 and 99 percent.
