The news that the state-owned banks (SoBs) have not carried out a finance ministry directive on publication of the names of their respective top ten loan defaulters does raise questions about their loyalty to the owner -- the government. The SoBs do rarely demonstrate defiance, but they have done it in the case of publication of loan defaulters' list. One year has already elapsed after the issuance of the directive by the Ministry of Finance to display the lists of top loan defaulters on their respective notice boards and post the same on websites. But none of the SoBs has reportedly carried out the instruction.
Such defiance on the part of these public sector banks might stir up surprise among many, for the defaulters are largely responsible for most of the financial troubles that these banks have been encountering for long. The top management of a couple of SoBs has argued that publication of the list might lead the top loan defaulters to file defamation cases against the banks. To strengthen their point of view, the bankers said newspaper reports carrying the names of top defaulters could not make any difference in the situation concerning banks' classified loans. True. But if the relevant newspapers did not face any defamation law suits, then why should the banks be scared of the same?
The fact remains that both the government and the management of the SoBs have been maintaining double-standard as far as lending and loan defaulters are concerned. The finance ministry, in many cases, has put pressure on the SoBs to overlook rules for some privileged borrowers having strong links with the high-ups in the government. These borrowers have got repeated rescheduling facilities and, lately, loan-restructuring facilities. When the government promotes irregularities, the management of banks and financial institutions under its control, naturally, will try to exploit the situation in their favour.
There is no denying that ground factors are quite favourable for the size of classified loans to become even bigger. Until September last, the amount of classified loans totalled more than Tk. 1.0 trillion. The amount will swell further if the rescheduled and written-off loans are taken into account. However, the size is likely to shrink, to some extent, at the end of the current year through window-dressing by the banks concerned.
The big chunk of the classified loans in the banking sector does belong to a few SoBs that have been the soft targets of some large delinquent borrowers who bother least about their image in society since the so-called stigma does not bar them from rubbing their shoulders freely with the powerful quarters.
Banks, time and again, have expressed their frustration over the outcome of their legal actions taken against loan defaulters. Since the money loan courts are overburdened with law suits, disposal of cases has been taking a long time. Stay orders coming from higher courts remain to be even greater hurdles. Under the prevailing circumstances, the establishment of a few more financial courts and a couple of benches in the High Court Division, especially to handle bank loan cases, cannot but overemphasised.
This particular issue was raised again and again in the past, but unfortunately relevant policymakers are found to be unwilling to feel the urgency of the matter. As far as default loan is concerned, the situation has reached an alarming level. So, actions need to be taken urgently for the greater industry of economy.
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