Tuesday, August 20, 2019 | ePaper

BREAKING NEWS:

Steps for reviving the banking sector

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FINANCE MINISTER AHM Mustafa Kamal on Thursday said that there will be no non-performing loan from now as Bangladesh Association of Banks would take necessary measures to check the loans. "The NPL becomes a matter of grave concern. But it is still in a manageable position. From now, NPL will not increase and BAB will take necessary initiatives to cut the existing classified loans," he said. BAB will present the overall situation of NPL before the government within one month so that it can take further steps to cut the existing rate of NPL. The government will also prepare a guideline to verify all the classified loans in the banking sector.
We do congratulate the Finance Minister for his tough stance to cut short the long queue of loan defaulters. His bold decision is undoubtedly help boost the economy. But we don't know whether he could be able to keep his promise in the long run. Earlier, we had heard several 'big talks' from the predecessor but ultimately witnessed nothing positive regarding the loan defaulters which apparently crippled the banking sector.
Of the some vital sectors in domestic economy, the condition of banking sector is highly miserable. Now, the total amount of defaulted loans is over Tk 1 lakh 32 thousand crore. The situation is highly alarming as huge amount of NPLs both in Nationalized Commercial Banks and in the development Financial Institutions, along with maintenance of inadequate loan loss provisions, reducing the country's overall credit quality. Political influence was the main reason behind the increasing NPL. Not only for banking sector, it's also a danger signal for country's total economy.  
Presently, the banking credit system, particularly loan disbursement to fresh entrepreneurs, has been facing debacle following the big amount of bad loans. It is directly resisting new investment while newcomers are getting frustrated. As a result, the job market is shrinking rapidly. The influential persons do not show interest for repaying their loans just because of their high political connection.
We must say, after getting the green signal of Finance Minister the banks would not hesitate to take stern action to recover their loans; no matter how powerful the loan-defaulters are. A successful and strong-based banking sector is an essential part of a developed economy.

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