Badrul Ahsan :
The aggregate defaulted loans both in industrial and agricultural sectors soared significantly in July-December period of the current fiscal year mainly due to absence of effective punitive measures against defaulters and poor recovery drives by the lenders, sources said.
According to a central bank data, the amount of defaulted industrial loans soared by 24.39 per cent or Tk 4,816.65 crore during the period compared with the corresponding period of the previous fiscal year.
On the other hand, the amount of defaulted loans in agricultural sector also soared by around 16 per cent or Tk 4,355.63 crore during the period compared with the same period of a year ago.
However, money market experts attributed the negative scenario as due to poor surveillance by the central bank and cool recovery drive by the commercial banks.
Besides, political influence in loan sanction, insufficient and ineffective punitive measures against defaulters coupled with poor business environment fuelled the borrowers not to repay their liabilities, the said. Former Bangladesh Bank governor Salehuddin Ahmed told The New Nation on Thursday that the defaulted loans had become a common feature in Bangladesh as some people did not repay the bank loans violating the rules and regulations.
‘The habitual defaulters think the authorities would not take any effective punitive measures against them if they do not repay the loans. The scheduled banks and central bank also failed to take exemplary measures against the habitual defaulters which fuelled the defaulted loans’, said Salehuddin Ahmed.
A central bank high official preferring anonymity said that there are questions about the disbursement process of the bank loans. “Repeat rescheduling practice also helped boost loan defaulters. Political connection of the borrowers forces lenders to reschedule their loans thus to help increase defaulters day by day,” he added.
“Due to an increase in non-performing loans, banks’ financial health will be vulnerable which will weaken their corporate governance,” cautioned the BB official.
Moreover, the defaulted loans play a significant role in increasing the interest rate on bank loans, he pointed out.
The BB data, however, showed that industrial loan disbursement by banks and non-bank financial institutions increased in the first half of the FY17.
Banks and NBFIs gave out Tk 144,606.63 crore in industrial loans in July-December of FY17 compared with Tk 124,026.28 crore disbursed in the same period of FY16.
The BB official said there was no reason for the amount of industrial loans to rise in the period as entrepreneurs were reluctant to expand their business due to the dull economic environment.
He said, ‘To get more loans, the entrepreneurs convinced the banks that their previous loans would be defaulted due to sluggish business if fresh loans were not disbursed to them.’
Industrial loan disbursement by five state-owned commercial banks – Sonali, Janata, Agrani, Rupali and BASIC – increased by 20.77 per cent to Tk 3,162.64 crore in first half of FY17 from that of Tk 2,618.68 crore in the correspondent period of the last year.
The defaulted loans in the SCBs increased by 41.42 per cent to Tk 8,651.53 crore compared with that of Tk 6,117.42 crore in the same period of FY16.
Industrial loan disbursement by the private commercial banks increased by 12.59 per cent to Tk 106,418.43 crore in the first half of FY17 from that of Tk 94,514.52 crore in the same period of FY16.
Defaulted loans in the PCBs increased to Tk 8,912.20 crore in six month of the current fiscal from that of Tk 6,661.23 crore in the same period of FY16.
The NBFIs disbursed industrial loans amounting to Tk 9,576.08 crore in the first half of FY17 against Tk 7,544 crore disbursed in the corresponding period of FY16, while their defaulted loans climbed to Tk 2,060.78 crore from Tk 1,893.99 crore year-on-year.
Meanwhile, the defaulted loans in Bangladesh Krishi Bank (BKB) held the largest amount of defaulted farm loans around Tk 2,156.76 crore – in the banking sector
BKB, however, disbursed the highest amount of farm loans among the banks against their total distributed outstanding farm loans during the period.
The BB data showed that as of December, 2016 the defaulted farm loans in state-owned banks stood around Tk 1,800.52 crore.
Besides, the agriculture sector defaulted loans in the private commercial banks (PCBs) and foreign commercial banks (FCBs) increased by more than 50 per cent.
Another BB official said, the state-run banks held larger amount of the agriculture defaulted loans than the PCBs and the FCBs as the state-run banks usually disburse the majority of the agriculture loans in the banking sector.
