Senior bankers and law minister are likely to meet the High Court judges and Attorney General's Office to discuss the ways of reducing troubled loans through effective implementation of existing laws.
The decision came at a special meeting on Wednesday with Bangladesh Bank (BB) Governor Fazle Kabir in the chair.
Law Commission Chairman ABM Khairul Haque and Bangladesh International Arbitration Centre CEO Muhammad A (Rumee) Ali also attended the meeting.
Necessary amendment to the existing laws relating to banking will be discussed at the high-level meeting, according to participants.
Besides, the central bank governor and law secretary are expected to participate in the proposed meeting, they said.
"We may sit with Judges of the High Court and Attorney General's Office to discuss the matter," Syed Mahbubur Rahman, chairman of the Association of Bankers, Bangladesh (ABB), told reporters after the three-hour meeting.
Both regulators and bankers are now working on how to reduce the amount of non-performing loans (NPLs) in the banking system, the ABB chief said.
"There is no alternative to reducing classified loans," the senior banker argued.
He suggested raising social awareness against the willful loan defaulters.
Sources, however, said senior bankers explained their various problems in recovering default loans from the defaulters, particularly willful ones and urged the authorities concerned to gear up legal process for such credit.
At the meeting, laws including Artha Rin Adalat (Money Loan Courts) were discussed.
The introduction of arbitration was discussed at the meeting, the participants said, adding that it should be introduced in Bangladesh to help settle loan disputes.
The central bank may submit its recommendations for amending relevant laws and regulations after detailed scrutiny to the ministry of finance to help reduce the volume of NPLs, according to BB executive director and spokesperson Md. Serajul Islam.
Three relevant pieces of law and regulations were discussed at the meeting, the spokesperson added.
The central bank has already formed three committees to prepare a set of recommendations for amending three relevant pieces of laws and regulations to help reduce the volume of default loans.
The committees are now working to submit the recommendations to the finance ministry for amending the Banking Companies Act, Bankruptcy Act and Negotiable Instrument Act along with Merger and Acquisition (M&A) regulations, another BB official told the FE earlier.
The central bank's latest moves came against the backdrop of a rising trend in loan defaults in the country's banking system in recent months.
The volume of NPLs jumped by nearly 34 per cent or Tk 250.67 billion to Tk 993.70 billion as on September 30, 2018, from Tk 743.03 billion as on December 31, 2017, according to the BB data.
The share of classified loans also rose to 11.45 per cent of the total outstanding loans in September 2018 from 9.31 per cent in December 2017.
The defaulted loans include substandard, doubtful and bad/loss of total outstanding credits, which stood at Tk 8,680.07 billion as on September 30, 2018, from Tk 7,981.96 billion as on December 31, 2017.
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