Banking sector can’t be hostage to defaulters

Update:

When loan defaulters continue to default, even after being given loan rescheduling facilities, their motives seem suspicious. But the banks which are proffering the loans, and the central bank, remain oblivious. The banks restrict their action to mere legal notices and informing the central bank, that is, Bangladesh Bank.

Why do the banks persist in this manner despite so many scams in the banking sector over the recent years? Former deputy governor of Bangladesh Bank, Khandakar Ibrahim Khaled, says, “Bangladesh Bank is not an independent organisation. That is why when a businessman close to the government puts on the pressure, it is obliged to provide these facilities.”

According to a Prothom Alo report, it was at the behest of Awami League president’s private sector development advisor and vice chairman of Beximco Group, Salman F Rahman, that the loan rescheduling facilities were provided. Yet it is his group now that is not repaying their loans. Certain defaulting companies are even applying for fresh loans.

According to the report, loans amounting to about Tk 15 thousand crore (Tk 150 billion) of 10 defaulting industrial groups were rescheduled in 2015. Two years on, about half of those groups are in default once again. Other than Beximco, the remaining four defaulting groups are MR Group of Narayanganj, SA Group of Chittagong, Ratanpur Group and Keya Group. If Jamuna, Thermex, Sikdar, Abdul Momen and Anontex, which received the same rescheduling facilities, can repay their installments, why can’t these groups? Repeatedly providing defaulting groups with loans, amounts to swindling the public of their money. There is a saying that ‘once bitten twice shy’, but our commercial banks don’t seem to mind being bitten repeatedly. Even the BASIC Bank and Hall-Mark scandals have made no difference to them. Why should the bank depositors pay the price for those unscrupulous deals?

The defaulters must repay the installments on their loans without further delay. Speedy legal action is required. If necessary, the lending banks may be given legal protection. Our banking sector cannot remain hostage to a handful of the loan defaulters.

* This editorial, originally published in Prothom Alo Bangla print edition, has been rewritten in English by Ayesha Kabir.

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