Tuesday, August 20, 2019 | ePaper

BREAKING NEWS:

Bad management helps soaring the bad loans

  • Print
DEFAULTED loans soared to Tk 110,874 crore as of March this year, which is the highest ever in the country's history. Bangladesh Bank on Monday revealed that Tk 16,962 crore of classified loans were added to the tally in the first quarter of this fiscal. It's also a record. Presently, the defaulted loans are 11.87 percent of total outstanding loans, up from 10.30 percent in December 2018.
The latest revelation of central bank is nothing surprising to us at all as we have already witnessed that entire banking sector is on the verge of collapse due to widespread corruption. The amount of defaulted loan was Tk 93,911 crore in the last fiscal. But not taking any initiatives to recover the loans and punishing the defaulters; the central bank had extended some extra ordinary facilities to loan defaulters, including easing the payment of instalments. The result was obvious -- many defaulters stopped paying instalments.
That means, Bangladesh Bank's strategy to lower default-loan figure giving extra facilities to defaulters has backfired. At one stage, the High Court stayed the implementation of the new loan rescheduling policy until June 23. But most defaulters still believe that they would be able to enjoy the benefits. And for this trend, it was not possible to curb upward trend of defaulted loans.
There are widespread allegations that banks have been forced to disburse loans to some certain quarters due to political influence. These politically-backed loan defaulters even don't think about to repay the money. So, the escalating defaulted loans have already choked private investment and limited the government's capacity to subsidise various sectors.
There is no way but the government and the central bank will have to take full responsibility for this awkward situation. We fear the country's total economy will have to bear the brunt of the soaring non-performing loans, if the government doesn't take immediate stringent measures against the defaulters.
It's not hard to understand why the new Finance Minister took the wrong move which gave a green signal to the defaulters that the government is flexible for them. The answer is simple. There is nothing to hide that; instead of serving the purpose of common people, the Ministry concerned tried to make benefitted a politically influential quarter.

More News For this Category

Eid homegoers most sufferers this year

AMIDST the collapsed train schedule, transport shortage and allegations of extra charges on buses, people are suffering most while returning after celebrating Eid to their workstations, particularly Dhaka. Most trains

Deaths on highways and a chaotic transport sector

NEWSPAPERS reported that at least 224 people were killed and 866 injured in 203 road crashes across the country in the 12 days of Eid-ul-Azha holiday rush this year. According

Corporal Punishment

Sir Frank Peters: [Many 'teachers' upon retiring will look back with remorse and weep with sorrow and shame when they think about the number of children they tortured, traumatized, and perhaps

Saving The Earth's Forests

Ladd Connell :This month, the world's leading climate scientists issued a report on land confirming what we already know: forests are a critical weapon in the battle against climate change.

Capital shortfall in state-run banks

More than two-third state-run banks faced capital shortfall in the first quarter of the year. Though the situation was gloomy, but the government is yet to take any action against

Find out a sustainable solution to protect leather market

ALTHOUGH tanners were supposed to start buying rawhide at the government-fixed rates, merchants refused to sell, demanding the payment of a "considerable" portion of their arrears. It comes after seasonal

Falling Corporate Tax

Anis Chowdhury and Jomo Kwame Sundaram :The harmful effects of falling corporate tax rates have been acknowledged in a recent International Monetary Fund (IMF) research paper. This trend, since the

Russian Interference

David C. Barker and Morgan Marietta, Ph.D :The good news is because of the bad news.The good news is that Russian disinformation and propaganda probably did not influence vote tallies

Ensure basic rights of the domestic helps

POLICE recovered the body of a domestic help Riya Akhtar, 14, from Dhanmondi in the capital on Friday. The girl died after falling from the 9th floor of a 10

Jugglery of growth figures failed to create jobs

BANGLADESH'S economic growth though mesmerising, it has been proved over the past decade that jobs could not be created proportionately for the youths keeping adjustment with the growth. Besides, female