Economic Reporter :
The cabinet on Monday approved in principle the draft of the Bank Company (amendment) Act-2021 to bring more discipline in default loans and good governance along with sustainability in the financial sector.
The draft was approved in a regular meeting of the Cabinet held virtually with the Prime Minister Sheikh Hasina in the chair.
Earlier, Bangladesh Bank (BB) proposed strict actions against willful defaulters in the draft bill seeking amendment to the act.
The willful defaulters will be barred from traveling abroad in business class, issuance of trade licences, car and property registration, while their identities will be made public, says the draft bill.
According to the draft bill, any borrower who fails to pay back his/her loans despite his/her ability will be termed as a willful defaulter.
Willful defaulters will be obstructed from attending any state functions or getting state recognitions.
Willful defaulters could never become directors of banks and financial institutions. The banks can file criminal case against them, according to the draft bill.
“The proposed law is required for overseeing banking business operation, controlling default loans, and ensuring good governance and stability in the financial sector,” said Cabinet Secretary Khandker Anwarul Islam while briefing reporters after the meeting.
The Bank Company Act 1991 doesn’t cover many issues since the number of banks, their assets, loans, deposits, leases, investment and many other things have increased, he said.
The draft law was framed, revising the related banking laws of different countries, the Cabinet Secretary said.
“The definition of the deliberate loan defaulters and actions against them are not much clear in the existing laws as the Bank Company Act 1991 was framed following the then context. But, the issues have precisely been mentioned in the article 27 (Kha and Ga) of the proposed law,” he said.
Besides, some new provisions were also incorporated in the draft law focusing on different issues like good management and recovery of the weak bank companies, actions against the responsible behind the critical conditions of the vulnerable banks, and reform and merging of banks.
If any director of a bank or any other man gets engaged in irregularities, the person will have to count a huge amount as fine alongside facing the criminal charge, said the cabinet secretary.
