Fully empower BB as central authority in banking sector

FE Team | Published: June 26, 2014 00:00:00 | Updated: November 30, 2026 06:01:00

FE Report
Speakers at a seminar Wednesday urged the government to fully empower the Bangladesh Bank (BB) as the central authority in the banking sector for both the state-owned banks (SoBs) and private commercial banks (PCBs).
They also blamed political intervention behind the rise in default loan and poor loan recovery in the SoBs.
"After the big loan scams like those involving Hall-Mark and Bismillah Group, it is proved that politicians are good at politics, not for banks. The political interferences are destroying the SoBs," economist and executive director of Institute of Micro-finance Prof MA Baki Khalili said at the seminar.
Dhaka School of Economics (DScE) organised the seminar on 'Management of Default Loan, Loan Recovery and Default Loan Classification' in the city.
Chief Executive Officer (CEO) of Bangla Chemical Muhammad Shahjahan Siddiqui presented a keynote at the seminar, with former NSU vice-chancellor Professor Hafiz GA Siddiqi in the chair.
Mr Khalili said once the SoBs' 48 per cent loan was classified, and it was 42 per cent in case of the PCBs. But, presently, the amount of classified loan with the PCBs has decreased remarkably.
"Now, classified loan with the private banks is below 10 per cent, but it is more than 25 per cent with the SoBs," he said.
In the keynote speech, Mr Siddiqui said loan defaulting has become an established tendency in the country.
"There are two kinds of defaulters - willful and non-willful. Banking laws of Bangladesh have no provision to identify the willful defaulters."
Mr Siddiqui said willful defaulters are subject to criminal prosecutions, whereas non-willful defaulters can avail assistance for being rescued.
"FIs used to sue all defaulters as willful, and take legal actions against them for nonpayment of loan, interest, penal interest and cost of recovery including expenses of legal proceedings."
Mr Siddiqui said in many other countries, willful and non-willful defaulters get different treatments for rehabilitation and recovery of loan.
The government can take various measures against the defaulters, like - blacklisting them, withdrawal of their passports, restricting them from assuming any public office, cancellation of membership of parliament or any statutory office, and imposition of bar to join any official delegation etc, he also said.
Mr Siddiqui also stressed on formation of legal provisions or banking policy for rehabilitation of sick industries.