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ERF advises BB to prevent abuse of power in debt rescheduling

Staff Correspondent
06 Nov 2023 22:19:46 | Update: 06 Nov 2023 22:20:09
ERF advises BB to prevent abuse of power in debt rescheduling

The Economic Reporters Forum (ERF) has advised Bangladesh Bank (BB) to provide strict monitoring to prevent anyone from abusing their power to take advantage of loan rescheduling.

Ten ERF representatives met with the Governor of BB on Monday as part of a consultative meeting with economists on economic stability.

The status of rescheduled loans currently stands at Tk 2,13,000 crore. Due to the special policy benefits provided by the central bank, a large volume of loan rescheduling has been created in the banks.

After the meeting, ERF President Mohammad Refayet Ullah Mirdha said, “ERF has provided suggestions on how to make the economy more stable. In response, Governor Abdur Rouf Talukder assured us that our economy will soon return to a stable state.”

He also said that BB will not invest any more from its reserves at this time.

The president said, “The restrictions imposed on the import of luxury goods should be properly monitored. ERF has asked for attention to be paid to the fact that money should not be smuggled under the guise of import and export.”

Last year, banks rescheduled defaulted loans worth Tk 63,719 crore. This was approved by BB and the banks themselves rescheduled. As a result, these loans were not classified as defaults.

However, at the end of last year, defaulted loans in the banking sector increased to Tk 1,20,649 crore. At the end of last June, this amount of defaulted loans exceeded Tk 1,56,039 crore. If the rescheduled loans were classified as defaults, non-performing loans in the banking sector would have exceeded 20 per cent.