Bankers want faster, less-costly solution to NPL problems

Bankers present at a seminar in the city Wednesday sought a faster, immediate and less-costly solution to the problem of rising non-performing loans (NPL) in the country's banking sector.
They said default-culture has gone deep and is rising.
Bankers also identified the huge amounts of non-performing loans and the high yield rates of savings instruments as some of the major reasons behind the high interest rates they are charging on their clients.
Commerce Minister Tofail Ahmed, who also attended the seminar, took exception to the 'special' facilities that the central bank has offered to 'big' borrowers to reschedule their overdue loans.
"Such indulgence would encourage default culture and affect credit- discipline", said the commerce minister.   
"Bad gets best benefits," said Mr Tofail, also a ruling Awami League heavyweight, on a note of anguish.
The seminar was on 'Mediation for Settlement of Commercial Disputes and Recovery of Overdue Bank Loan'. At the seminar issues involving bank loan and stock market scams cropped up.
Mr. Tofail expressed his strong sympathy for the sock market investors who had burnt their fingers in the latest stock market scam and blamed the banks partially for the debacle.
He said banks bagged big profits from the country's share market amid the bull run in 2010, but withdrew their funds at one stage, leading to the burst of the bubble.
Mr Tofail urged the banks and financial institutions to do something for the millions of investors beggared through the stock market crash.
"Pay attention to these innocent investors, who do not need any dispute resolution," said the minister, regretting that none is paying heed to their requests, including the Securities and Exchange Commission.
Metropolitan Chamber of Commerce and Industry (MCCI) President Syed Nasim Manzur earlier raised the issue of special treatment in the case of some big borrowers and stressed the need for an immediate end to such discrimination and demanded cuts in bank- interest rates.
Bangladesh International Arbitration Centre (BIAC) and the Metropolitan Chamber of Commerce and Industry, Dhaka (MCCI) jointly organised the seminar to discuss the issues and share thoughts on mediation mechanisms for solution of commercial disputes and recovery of the lent-out dud money.
Moderated by BIAC chairman Mahbubur Rahman, the seminar was also addressed, among others, by Secretary, Legislative and Parliamentary Affairs Division, Mohammad Shahidul Haque, Bangladesh Bank Deputy Governor S.K. Sur Chowdhury and former Attorney-General Fida M Kamal.
Former Adviser of Caretaker Government Abdul Muyeed Chowdhury and Managing Director of Midland Bank Ahsan-uz Zaman presented keynotes on 'Mediation for Settlement of Commercial Disputes' and 'Mediation for Recovery of Overdue Bank Loans' respectively.
Held at the MCCI auditorium, the seminar was attended by a large audience that included businessmen, entrepreneurs, academics, lawyers, and representatives from various government and non-governmental organisations including corporate houses.
Speakers at the seminar underscored the need for implementation of ADR mechanisms to reduce backlog of cases.
They pointed out that the country's judiciary is overburdened with more than 2.5 million cases, demanding effective utilisation of ADR methods to lessen stress on all tiers of courts.
Mr Ahsan-uz Zaman in his paper pointed out that as many as 35,191 cases were filed by various banks, involving some Tk 371 billion, as of December 2013.
Among these, four state-owned banks-Sonali, Janata, Agrani and Rupali-bear a load of Tk 206 billion in 16,066 cases.  
Four specialized banks, namely, Krishi Bank, Rajshahi Krishi Unnayan Bank, Bangladesh Development Bank and Basic Bank share Tk 18.79 billion in 6680 suits awaiting disposal for long.
To settle the rising overdue loan in the country's banking sector, speakers at the seminar called for a faster, less-expensive solution. And they identified mediation mechanism for the solution of commercial disputes.
Welcoming the guests, BIAC Chief Executive Toufiq Ali stated that BIAC was introducing modern techniques in mediation, and supportive of Bangladesh laws for settlement of disputes out of courts.  
The MCCI president, Mr Nasim Manzur, described the merits of arbitration and mediation and the role played by BIAC.  He also said that firms that are regularly repaying their loans to banks are currently suffering on account of defaults by others.
The Bangladesh Bank Deputy Governor, S.K. Sur Chowdhury, assured the bankers that the central bank will support disposal of money-loan cases through mediation if bankers follow relevant laws and guidelines.
He said that the central bank will form a committee comprising members from all concerned to look into the issue.  
BDBL Managing Director Dr Zillur Rahman, Pubali Bank Managing Director MA Halim Chowdhury, Mercantile Bank Managing Director M Ehsanul Haque, National Bank Managing Director Shamsul Huda Khan and a few prominent businesspeople also spoke.  
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