Use of the services of private asset management companies or recovery agents to help recover a huge amount of stuck-up loans in the country's banking sector was stressed at a seminar held in Dhaka Saturday.
"Bad loans can be recovered by appointing recovery agents. If the banks could recover even 10 per cent of their bad loans through any kind of settlement they should do it," said Mr. Ibrahim Khaled, a former deputy governor of the central bank and the current chairman of Bangladesh Krishi Bank.
He said bad loans of the country's commercial banks particularly that of the state-owned banks have increased due to political interference.
The seminar titled, "Success and Failure in the Recovery of Bad Loans of the Private Sector" in the city was organized by the Peoples Development Services Corporation Ltd (PDSC), a local loan recovery agent.
Managing director and chief executive officer of the Agrani Bank Ltd. Syed Abu Naser Bakhtiar Ahmed, managing director of the Ansar VDP Bank Nurul Huda Chowdhury and chairman of PDSC MA Rahman spoke on the occasion.
Mr. Khaled said private agents could be useful in the recovery of the huge bad loans belonging to different commercial banks, especially to the state-owned banks.
He appreciated the private banks' success in keeping the size of their bad loans below 5.0 per cent and said, "The services of the recovery agents could be found useful in getting back the bad loans of the state-owned commercial banks."
"The foreign loan recovery agents have huge capital and expertise. They have also the appraisal capacity. Sometimes they purchase bad loans of different banks at a certain discount. Then they recover the same and earn profit," the chairman of the Bangladesh Krishi Bank said.
"The local recovery agents should develop such expertise with a view to establishing professionalism in this emerging sector," he said.
CEO of the Agrani Bank Mr. Bakhtiar said: "When we write off bad loan from our balance sheets, the people think that the banks have forgotten the same. But we never forget it. We, actually, want to recover the loan by any means."
Mr. MA Rahman said: "The actual size of classified loan of the commercial banks would be around Tk 360 billion. Out of that amount, some Tk 130 billion has been written off and the rest Tk230 billion is visible."
"Recovery of the huge classified loans has become difficult by the banks. So, there is no alternative but to transfer the responsibility of the loan recovery to the private sector," he said.
"The PDSC that started journey in 1996 has so far recovered Tk 600 million bad loans of different banks and financial institutions in Bangladesh. Besides, it has settled Tk 3.0 billion bad loans of the different banks which will be recovered soon," the chairman of PDSC claimed.
