WHEN the country’s banking sector is facing tremendous problem, the central bank, custodian of all banks and financial institutions, is going to offer a generous scheme with easing the large loan scheduling that would further weaken the banking governance. Bangladesh Bank and a Finance Ministry committee have come up with the decision which will hurt the banking sector and the economy at large. Once implemented, the scheme will also enable big loan defaulters to obtain many other financial benefits.
Four years ago, a similar bailout offer was made to large loans defaulters, allowing them to reschedule and repay loans on significantly relaxed terms. But the special bailout scheme failed to get desired results as big loan defaulters did not make any sincere effort to pay back their loans. According to the new proposal, loan defaulters will get 13 to 15 years, with a grace period of up to two years, to pay back their loans. They only need to give a down payment of a maximum 2 percent of their outstanding loans, instead of the current requirement of 10 to 15 percent, for regularizing their loans. What a facility! At present, the amount of defaulted loans is around one lakh crore which is 10.30 percent of the total outstanding loans as of December last year against 2.66 lakh loan defaulters.
It’s clear like daylight that, if the scheme is implemented, it would push the banks into deep troubles. So far we know, the Finance Ministry had formed the committee in June last year to prepare a bailout package for loan defaulters in three sectors — trading, shipbuilding and steel mills — to help them revive their businesses but BB recommended to extend the facilities for all. The central bank had said the borrowers who took advantage of the previous bailout scheme did not pay back loans as per the restructuring conditions. As a result, non-performing loans was on the rise. Under the generous scheme, any defaulter could seek rescheduling, and this could create havoc on the banks’ financial discipline.
What is most disgraceful that, the marginal-income group people, including farmers, have to land in jail even for failing to pay a little amount of loan in due time, whereas the big loan defaulters are given unfair facilities even they are not interested to pay their loans.
