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Ahammad Parvej Khan
The government is likely to go tougher on the loan defaulters against the backdrop that the ever-increasing amount of bad loans has emerged as the biggest challenge for the overall banking industry.
According to official data, presently the total amount of outgoing loans stands at 8.5 lakh crore out of which the amount of non-performing loans is about Tk 1 lakh crore. This means around 12 percent of the total outstanding loans are non-performing loans.
However, the recovery rate of defaulted loans continues to be very poor. According to sources, only Tk 27,000 crore loans have been recovered in current fiscal year.
Against such a backdrop, newly-appointed Finance Minister AHM Mustafa Kamal on Thursday assured that there will be no Non-Performing Loan (NPL) from now on as Bangladesh Association of Banks (BAB) is going to take necessary measures to check the loans.
He also said that the amount already classified of loan will be brought down in a speedy way.
The Finance Minister came up with the remarks while talking to newsmen after holding his maiden meeting with a delegation of the Bankers Association of Bangladesh (BAB) at the Ministry of Planning.
Mustafa Kamal informed reporters that he had kept one condition before the BAB leaders before sitting with them that from now it will not be allowed to increase the amount of defaulted loan even by Tk 1.
“I told them that it’s their concern as to how they will stop it and how to take care or manage it, and they have assured me about this”, he said adding that the meeting also discussed the other burning issues in the banking sector.
He said the BAB members have given detailed information about the industry which they will verify and finally make evaluation on it.
The central Bank and Financial Institution Division of the finance ministry have been given responsibility to evaluate and after completion of evaluation the ministry of finance will go for measure.
BAB Chairman Nazrul Islam Mazumder and others directors of the association were present at the meeting.
Kamal said the government will prepare a guideline to verify all the classified loans in the banking sector and will take necessary steps for checking the loans.
“BAB will give us a list of loan defaulters, their borrowing amounts and interest amounts. We will verify the list in line with data of the central bank and the Financial Institutions Division. Then, we will prepare the guideline and go for action,” he added.
Nazrul said BAB is going to take necessary steps against NPL with support from the government.
“Comparing the neighbouring countries, the existing rate of NPL is not a matter of concern for us. We’ll take all kind of measures for reducing NPL from today,” he said.
Nazrul said BAB will present the whole scenario of NPL before the government within one month so that it can take further steps to cut the existing rate of NPL.