NPL of SoBs increased by Tk 3,000 cr in a year

Staff Correspondent: In the space of one financial year, the defaulted loans of state-owned banks have increased by Tk 3,000 crore. In the financial year 2021-22, the defaulted loans were Tk 55,920 crore, which increased to Tk 58,920 crore in the outgoing financial year (2022-23). According to the Finance Ministry’s Financial Institutions Division (FID), defaulted loans of state-owned banks are now Tk 58,920 crore. May be somewhat more or less as final. However, according to the International Monetary Fund (IMF), this loan amount will be higher. Because, the company favors defaulting of doubtful loans, loans under court order moratorium, rescheduling and restructuring loans.
It is known that almost a quarter of a million cases of defaulted loans are pending in the courts of the country. Tk 166,000 crore are stuck there. Besides, at the same time, the banks could not collect the money as per the target from the defaulters. At the beginning of the financial year, the target of recovery from classified loans was announced, but it was not achieved in the end. This information was found in the relevant sources.
Rising defaults in state-owned banks could eventually lead to major disruptions to International Monetary Fund (IMF) compliance. Because, the conditions given by the organization against the issue of $4.7 billion debt to Bangladesh are the formation of an asset management company to recover bad debt, change in the definition of bad debt, reducing the bad debt rate of state banks to 10 percent. But still the rate of defaulted loans is 24.85 percent in state-owned banks.
If you want to know, the executive director of the research institute Policy Research Institute. Ahsan H Mansoor told Daily Industry that there is no benefit in setting targets to reduce bad loans. It remains to be seen what measures are being taken to achieve this. He also said that political commitment is also needed to reduce defaulted loans.
If you want to know about defaulted loans, Basic Bank Managing Director and CEO Anisur Rahman told Daily Industry that strict action is being taken against defaulters. Initiatives have also been taken to recover from the defaulters on case-to-case basis. Hopefully, it is also getting effective results. BASIC Bank has entered into an APA (Performance Agreement) with the Department of Financial Institutions on defaulted loans. Hope it can be achieved. A senior official of the same bank said that the basic bank authorities have started a strict campaign to control and collect defaulted loans. In particular, the branches have been instructed to submit their passports to the immigration so that the voluntary debtors of this bank can’t flee abroad. In light of this, the passports of some defaulters have already been submitted to immigration with the permission of the court. Passports of other defaulters will also be submitted in phases. Further action will be taken against defaulters in phased manner.
Basic Bank plans to bring down the current defaulted loan status to Tk 7000 crore and recover Tk 160 crore from the defaulters. Basic Bank has recovered Tk 154.12 crore defaulted loans in the financial year ended.
According to the concerned, although there are some laws in the country to recover defaulted loans, there is a lack of enforcement. On the other hand, due to lack of political will, strict measures have never been taken against the defaulters in the banking sector, instead they have always received various benefits. Due to which the defaulter is not able to reduce the loan. However, many countries like Vietnam, China, South Korea have reduced default loans by enforcing strict laws.