Business Desk :
Bangladesh International Arbitration Center (BIAC) and Dhaka Chamber of Commerce and Industry (DCCI) jointly organized a Roundtable Discussion themed “ADR in Managing the Risk of Non Performing Bank Loans” at DCCI Auditorium, Dhaka on Saturday, said a press release.
Mohammad Shahidul Haque, Senior Secretary, Legislative and Parliamentary Affairs Division of the Ministry of Law, Justice and Parliamentary Affairs attended as Chief Guest and Ahsan-uz Zaman, Managing Director and CEO of the Midland Bank Limited and Professor Imran Rahman, Special Advisor to the Board of Trustees ULAB were Special Guests. Mahbubur Rahman, Chairman, BIAC moderated the programme.
The Keynote paper was presented by Barrister Shafayat Ullah, EVP and Head of Legal, The City Bank Limited. He said large defaulters are rarely penalized, and instead loans are being restructured.
To overcome the problems he emphasized on introduction of Alternative Dispute Resolution (ADR) as an alternative route that can be used in managing default loans.
He informed that the 11 percent of the total loans are bad loans in Bangladesh at present. All organizations should incorporate Mediation-Arbitration Clause in the commercial contracts with the provision of both Mediation and Arbitration under an institutional framework with rules to administer these processes like BIAC, he opined.
He also said the Artho Rin Adalat Ain 2003 should be amended and include the provision of arbitration within the ambit of the definition of ‘Adalat’. He said ADR saves time, cost and it is confidential.
Mohammad Shahidul Haque, Senior Secretary, Legislative and Parliamentary Affairs Division of the Ministry of Law, Justice and Parliamentary Affairs, said,
“We need to concentrate on the implementation part of our legislation. BIAC’S joining the process of settling commercial disputes beyond the court has created a ray of hope. BIAC’s activities in the last 7 years including handling NPL cases, arbitration, mediation, training, workshops have substantial contribution in the field of promoting ADR.”
He suggested that equality and equal opportunity in the eye of law must be ensured. In the developed nations 2 percent NPL is allowable where in Bangladesh it is over 10 percent, which is not accepted.
He said if policy reforms are needed to reduce NPL, government is willing to do that. Financial Institutions Division should come up with a few proposals of how to address the NPL issues. Bangladesh Bank, Office of the Chief Justice, Ministry of Law, Bankers’ Association and Ministry of Finance should work collectively to address the NPL issues.
Chairman of BIAC Mahbubur Rahman said that to convert non-performing loans into performing loans, effective implementation of law is mandatory.
For a healthy banking sector he urged for implementation of law and amendment of regulations if needed. He said that the aggravated situation with Non Performing Loans (NPL) in our country continues to be a matter of great concern.
Our financial sector can be further strengthened if we can manage down the volume of NPL in the financial industry. BIAC is working closely with the financial sector to address the issues of managing the risk of Non Performing Loans, he said.
BIAC along with Bangladesh Bank and Association of Bankers Bangladesh Ltd. has been working out a draft guideline for the banks which will expedite the process of ADR and make it more effective in the country, he added.
Abul Kasem Khan, President, DCCI said at the end of March 2018, NPL is banking industry stood Tk 885 billion. NPL is at 1078 percent of total outstanding, which was 9.31percent in December 2017.
He informed that NPL in Malaysia is 1.6 percent, Philippines is 1.9 percent, Thailand and Indonesia is 2.9 percent, Cambodia is around 2.5 percent, Sri Lanka is 2.6 percent and Nepal 2 percent.
He also recommended for improvement of corporate governance of banks and under proper due diligence process, adopt zero tolerance policy on loan recovery, bring loan defaulters and their collaborators under law and introduce alternative recovery options.
Bangladesh International Arbitration Center (BIAC) and Dhaka Chamber of Commerce and Industry (DCCI) jointly organized a Roundtable Discussion themed “ADR in Managing the Risk of Non Performing Bank Loans” at DCCI Auditorium, Dhaka on Saturday, said a press release.
Mohammad Shahidul Haque, Senior Secretary, Legislative and Parliamentary Affairs Division of the Ministry of Law, Justice and Parliamentary Affairs attended as Chief Guest and Ahsan-uz Zaman, Managing Director and CEO of the Midland Bank Limited and Professor Imran Rahman, Special Advisor to the Board of Trustees ULAB were Special Guests. Mahbubur Rahman, Chairman, BIAC moderated the programme.
The Keynote paper was presented by Barrister Shafayat Ullah, EVP and Head of Legal, The City Bank Limited. He said large defaulters are rarely penalized, and instead loans are being restructured.
To overcome the problems he emphasized on introduction of Alternative Dispute Resolution (ADR) as an alternative route that can be used in managing default loans.
He informed that the 11 percent of the total loans are bad loans in Bangladesh at present. All organizations should incorporate Mediation-Arbitration Clause in the commercial contracts with the provision of both Mediation and Arbitration under an institutional framework with rules to administer these processes like BIAC, he opined.
He also said the Artho Rin Adalat Ain 2003 should be amended and include the provision of arbitration within the ambit of the definition of ‘Adalat’. He said ADR saves time, cost and it is confidential.
Mohammad Shahidul Haque, Senior Secretary, Legislative and Parliamentary Affairs Division of the Ministry of Law, Justice and Parliamentary Affairs, said,
“We need to concentrate on the implementation part of our legislation. BIAC’S joining the process of settling commercial disputes beyond the court has created a ray of hope. BIAC’s activities in the last 7 years including handling NPL cases, arbitration, mediation, training, workshops have substantial contribution in the field of promoting ADR.”
He suggested that equality and equal opportunity in the eye of law must be ensured. In the developed nations 2 percent NPL is allowable where in Bangladesh it is over 10 percent, which is not accepted.
He said if policy reforms are needed to reduce NPL, government is willing to do that. Financial Institutions Division should come up with a few proposals of how to address the NPL issues. Bangladesh Bank, Office of the Chief Justice, Ministry of Law, Bankers’ Association and Ministry of Finance should work collectively to address the NPL issues.
Chairman of BIAC Mahbubur Rahman said that to convert non-performing loans into performing loans, effective implementation of law is mandatory.
For a healthy banking sector he urged for implementation of law and amendment of regulations if needed. He said that the aggravated situation with Non Performing Loans (NPL) in our country continues to be a matter of great concern.
Our financial sector can be further strengthened if we can manage down the volume of NPL in the financial industry. BIAC is working closely with the financial sector to address the issues of managing the risk of Non Performing Loans, he said.
BIAC along with Bangladesh Bank and Association of Bankers Bangladesh Ltd. has been working out a draft guideline for the banks which will expedite the process of ADR and make it more effective in the country, he added.
Abul Kasem Khan, President, DCCI said at the end of March 2018, NPL is banking industry stood Tk 885 billion. NPL is at 1078 percent of total outstanding, which was 9.31percent in December 2017.
He informed that NPL in Malaysia is 1.6 percent, Philippines is 1.9 percent, Thailand and Indonesia is 2.9 percent, Cambodia is around 2.5 percent, Sri Lanka is 2.6 percent and Nepal 2 percent.
He also recommended for improvement of corporate governance of banks and under proper due diligence process, adopt zero tolerance policy on loan recovery, bring loan defaulters and their collaborators under law and introduce alternative recovery options.
