Editorial Desk :
As much as it’s important to recover bad loans, it’s also equally important that our state-run and private banks actively engage in bailing out ailing businesses with strong potentials for becoming profitable ventures in the future. This is not good music to the ears of the taxpayers who claim that government owned banks ruthlessly continue to trim them off their money and don’t receive services in return. However, though bailouts do not necessarily avoid an insolvency process but have been proved to be a decisive factor for many struggling businesses to sustain.
That said – currently there are many business organisations struggling to survive but, with the required working capital or financial assistance from banks – can become profitable ventures. By aiding them our banks would not only ensure to recover their loans but would also play a vital role in creating job opportunities while increasing its tax and revenue earnings.
This is a ruthless way to think that just by filing court cases and jailing the defaulters the banks would be able to realise the loans. The way is not only ruthless and thoughtless but also ungainful. The bankers must think like bankers. But they do not think of saving the industry or business only because it is not very easy.
They have to save the economy and jobs of thousands of people. The present role of the bank with regard to defaulter is to wreck the industries and businesses. The imprisoned owners of industries and businesses should be available for discussion with the banks and not in prison or out of the country.
A bailout scheme should be granted if, and only if, it can be proven that the company can be returned to profitability. In that case banks should move ahead with their financial rescuing schemes. Many such businesses have been rescued and turned into profitable ventures in the Western countries. The car industry is a shining example of successful government bailout in the USA where a number of state-owned banks played a crucial role. If major car companies had folded in 2008, the loss of jobs and general effect on the US economy at that time would have been staggering. By providing loans to prop up companies such as GM and Chrysler, many of the leading automobile companies were prevented from collapsing.
Moreover, most successful founders in the Western World have a long history of multiple failures. What needs be understood is that – it is not the success that breeds success rather it is our collective ability to endure failure and cooperate the business owners to stand-up on their feet. For instance, at least five promising start-up business ventures is reported to have collapsed in Bangladesh in recent times – mainly because of shortage of running capitals where the banks could have played a key role in rescuing them. These are reportedly – a social media management venture, a Tech school for coding and electronics education institute for kids, a Dhaka based on demand delivery service and an online buying-selling market place.
On a different account, owners of at least a couple of dozen medium and small scale garment sub-contracting factories have reportedly shutdown in the past years for failing to obtain bank loans. Not to say, at the end of the day – it’s the country’s economy, which suffers a set back if businesses collapse. True, that we have many defaulters who have ran away with acquired loans, but also true that many were forced to shut down their units due to financial inadequacies and flee.
Understandably, it may sound risky but in this country of thousands of crores of unrecovered bad loans – granted to known and unknown dubious parties – it is often the honest entrepreneurs who suffer the most when they need the loan the most.
Taking the above reality into serious consideration our banks should not only become extra-ordinarily judicious in analysing loan applications, verifying the authenticity of collaterals but simultaneously, may function at par with failing business organisations – meaning aid them to recover from their shortcomings.
Experts believe our banks should introduce a separate wing for analysing potentially future profitable ventures struggling to survive in spite of displaying professionalism, commitment and goodwill. Lastly, banks are not meant solely for realizing interests and profits while lending and recovering loans, they are also supposed to be integrated into the financial system for ensuring growth of the economy by standing beside business houses in the time of their dire need.
As much as it’s important to recover bad loans, it’s also equally important that our state-run and private banks actively engage in bailing out ailing businesses with strong potentials for becoming profitable ventures in the future. This is not good music to the ears of the taxpayers who claim that government owned banks ruthlessly continue to trim them off their money and don’t receive services in return. However, though bailouts do not necessarily avoid an insolvency process but have been proved to be a decisive factor for many struggling businesses to sustain.
That said – currently there are many business organisations struggling to survive but, with the required working capital or financial assistance from banks – can become profitable ventures. By aiding them our banks would not only ensure to recover their loans but would also play a vital role in creating job opportunities while increasing its tax and revenue earnings.
This is a ruthless way to think that just by filing court cases and jailing the defaulters the banks would be able to realise the loans. The way is not only ruthless and thoughtless but also ungainful. The bankers must think like bankers. But they do not think of saving the industry or business only because it is not very easy.
They have to save the economy and jobs of thousands of people. The present role of the bank with regard to defaulter is to wreck the industries and businesses. The imprisoned owners of industries and businesses should be available for discussion with the banks and not in prison or out of the country.
A bailout scheme should be granted if, and only if, it can be proven that the company can be returned to profitability. In that case banks should move ahead with their financial rescuing schemes. Many such businesses have been rescued and turned into profitable ventures in the Western countries. The car industry is a shining example of successful government bailout in the USA where a number of state-owned banks played a crucial role. If major car companies had folded in 2008, the loss of jobs and general effect on the US economy at that time would have been staggering. By providing loans to prop up companies such as GM and Chrysler, many of the leading automobile companies were prevented from collapsing.
Moreover, most successful founders in the Western World have a long history of multiple failures. What needs be understood is that – it is not the success that breeds success rather it is our collective ability to endure failure and cooperate the business owners to stand-up on their feet. For instance, at least five promising start-up business ventures is reported to have collapsed in Bangladesh in recent times – mainly because of shortage of running capitals where the banks could have played a key role in rescuing them. These are reportedly – a social media management venture, a Tech school for coding and electronics education institute for kids, a Dhaka based on demand delivery service and an online buying-selling market place.
On a different account, owners of at least a couple of dozen medium and small scale garment sub-contracting factories have reportedly shutdown in the past years for failing to obtain bank loans. Not to say, at the end of the day – it’s the country’s economy, which suffers a set back if businesses collapse. True, that we have many defaulters who have ran away with acquired loans, but also true that many were forced to shut down their units due to financial inadequacies and flee.
Understandably, it may sound risky but in this country of thousands of crores of unrecovered bad loans – granted to known and unknown dubious parties – it is often the honest entrepreneurs who suffer the most when they need the loan the most.
Taking the above reality into serious consideration our banks should not only become extra-ordinarily judicious in analysing loan applications, verifying the authenticity of collaterals but simultaneously, may function at par with failing business organisations – meaning aid them to recover from their shortcomings.
Experts believe our banks should introduce a separate wing for analysing potentially future profitable ventures struggling to survive in spite of displaying professionalism, commitment and goodwill. Lastly, banks are not meant solely for realizing interests and profits while lending and recovering loans, they are also supposed to be integrated into the financial system for ensuring growth of the economy by standing beside business houses in the time of their dire need.
