Bank's assets mainly refer to loans to its customers. Whether a bank is good or bad is judged by its asset quality. Generally non-performing loans of a bank means that the loans provided by it are not being paid back regularly. Loan scam is now a buzzword. But the duly processed loans are also defaulted on a large scale. Most of the default loans are still backed by quality collateral securities. Collateral securities do not always give guarantee for repayment of all its dues. The biggest cause of it is complication in selling mortgaged property. Buyers are confident about the title deeds and documents of mortgaged property, but they are worried about legal complexities and complexities involving physical possession of purchased property. Most of the mortgage providers are locally and politically powerful. General buyers fear and feel uncertain about access to mortgage property market. This market is characterised by buyer dominance. The buyer sometimes bids 20-30 per cent of actual market value. Banks have to sell out the property at nominal prices like that which do not cover the outstanding loan amount of the bank. As a result, the property remain unsold or mortgaged for longer periods that push up the default loan amount. In this regard, sometimes respective loan officers have to face questions about over valuation of the property involved. Beside this, existing law and regulations, in most cases, favour defaulters and are not comfortable for general buyers of sellable mortgages. To drop default loan of banks, the law and regulations related to disposal of mortgaged property should be easier and buyer-friendly. If it happens, it is hoped, the default loan and willful default culture will be reduced.
Md. Anowar Hossain
BDBL, Head Office, Dhaka
anowarfb@gmail.com
Selling of mortgaged property
FE Team | Published: December 21, 2017 19:57:45
Selling of mortgaged property
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