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Govt. needs new policy to recover default loans

19 Mar 2023 00:00:00 | Update: 18 Mar 2023 23:16:55
Govt. needs new policy to recover default loans

None can say for sure if there has been any visible action taken against loan defaulters and black money holders in the country. Whenever the country reaches a critical juncture it is the common people who ultimately help the country to turn around. They may not do that being the part of any policy making of the state or doing something themselves, but they do it by taking the burden of taxes imposed in many different ways.

We have rarely seen any money recovered from loan defaulters to help the economy. Even during the crisis period we have seen how a handful of people making money out of the misery of tens of thousands of people. During the corona period it wasn’t any exception. A section of people reportedly made it to the list of the rich people of the country.

Every disaster – be it natural or be it man-made- it comes to a section of people as a boon while for others it comes as a bane. Every year political observers, renowned economists and people almost from every profession demand punishment for loan defaulters but somehow they are always able to keep themselves out of the net of the laws.

Consequently, the amount of defaulted loan continues to rise while intolerable burden of taxes keeps hurting the poor people of the country. The government should tighten the noose around the neck of these loan defaulters. But every time instead of taking any steps to recover the default loan the defaulters are given the opportunity of rescheduling their loans. It is said for saying that the amount of default loan begins to decline. Does really that happen? We don’t have any evidence that it keeps declining. Rather it continues to rise.

On March 16 The Business Post ran a report on the present situation of default loans in the country. The report demonstrated how the loan defaulters are escaping the net of laws taking advantage of loan rescheduling. As per the report, loan rescheduling by banks rose by a staggering 154 per cent in the October-December quarter of last year mainly due to the Bangladesh Bank easing the policy. The report further said a total of Tk17, 768 crore was rescheduled during the said quarters. It was up from Tk6, 976 crore in the same period of 2021.

From the data published by the daily points out to the fact that loan rescheduling is not working well in recovering default loan. It is said that banks want to clean their balance sheet compelling them to go for rescheduling default loan. It sounds bizarre as banks clean their balance sheet on paper but the money remains in the pockets of those loan defaulters. Isn’t it pointless and futile effort when banks do their paper works but in reality such loans are never recovered? Sometimes a negligible amount is recovered which is not mentionable amount at all.

When defaulters are given the advantage of rescheduling naturally non-performing loans also get the similar facilities. When the businesses are struggling to survive from the onslaught of the world economic crisis and dollar shortage such staggering amount of default loans and non-performing loans are posing a big challenge for the government.

We think that the policymakers of the government should change their strategy and devise a new policy to recover the money from those people. The authorities concerned and the central banks must sort out who are willful defaulters and who are not. If they can be categorized it will be easier for it to take stern action accordingly.

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