Wilful defaulters should be punished

Finance Minister AHM Mustafa Kamal disclosed in parliament a list of the country's top 300 loan defaulters. These defaulters have gobbled up Tk 509.42 billion of bank money.

The finance minister said that the total number of loan defaulters in the country has increased to 170,390 in 2018. The defaulted loans now stand at over Tk 1.02 trillion as of 2018.

This is an alarming situation for the country.

The amount of non-performing loans is about 20 per cent of the national budget. This is a bad sign for the banking sector and for our economy.

Two types of loan defaulters are usually found in the banking sector across the world. The first includes those who default because of losses incurred for various reasons. The second group are those who borrow from the banking system but never repay the same at all.

A very few of them are defaulters by chance. But the rest are wilful defaulters. I believe that this particular group of borrowers has created this dismal situation in our banking sector.

It is true that insufficient collateral against the loan, mortgaging the same asset to more than one bank and overvaluation of collateral assets, increase the risk of loans going bad.

But this does not mean that all defaulters are like this. The whole business community cannot be portrayed as criminals because of the wilful defaulters.

We have found in Bangladesh that large loan defaulters get the opportunity to have their loans rescheduled several times whereas such opportunities are non-existent for small and medium enterprises.

The wilful loan defaulters should be punished as they have tainted the image of the business community at home and abroad and severely affected the banking sector.

Md. Zillur Rahaman

Satish Sarker Road,

Gandaria, Dhaka.

[email protected]