We, however, fail to comprehend despite repeated scandals and setbacks in the banking sector, why the recurrence of rescheduling of bad loans is not stopping? What political machinations are incurring such huge loss to public banks and financial institutions?
The borrower, through business and financial predicaments may get justifiably get loans rescheduled once or twice, but the frequent rescheduling clearly suggests it is being done deliberately to serve both financial and political interests of particular business quarters. Additionally, medium scale borrowers may be given extra time by rescheduling loans so that they can repay but in reality it is the big-scale borrowers who are getting away with suspicious rescheduling for good many years now. In fact one can’t be wrong to believe that politically powerful people are using loan rescheduling to deny repayment and deprive banks of their due this way until a convenient time for loan write-off. We are afraid if the trend is not put to an end right away bad loans will fast turn state-owned banks into huge financial liabilities.
Rescheduling of loans using political instability factors or whatever reasons is not acceptable in bank management. The loans should have been granted in the first place on credible business consideration with concrete assurance of getting it back in time. In the wake of mounting bad loans, the management in government run banks must realise that it has no right to wilfully squander public money. In such cases in other countries, people playing with defaulted loans are jailed and their property seized to recover the money. Nothing such happens in Bangladesh. Isn’t this a clear sign of cautiously planned disorder to favour dubious borrowers illegitimately?
Observing deeply inside indexes of a number of state-owned banks, the chances for recovering big loans are thin. Moreover, the piled up thousands of crores of defaulted loans are increasing due to lack of sincerity and seriousness of top management persons running those banks. Banks with disruptive ownerships in private sectors are experiencing the worst situations. They are influential and politically well connected and the central bank often faces difficulties taking action against those banks.
In our view frequent rescheduling of old loans must be carefully considered away from political influence. Otherwise public sector banks will eventually collapse to spread chaos and disorder in the country’s entire financial sector.
