Transparency Interna-tional Bangladesh (TIB) has expressed 'deep concern and disappointment' over the central bank's reported compromise and non-compliance with its own policy to allow Beximco Ltd another round of rescheduling of its loan.
It said in a media statement on Friday that the scope of rescheduling of the loan of 'a leading perennial loan defaulter' for one more time will set another bad precedence with terrible consequences for the ailing financial sector.
The anti-graft body has called upon Bangladesh Bank to refrain from 'this self-defeating move' and appealed to the government to consider TIB's longstanding recommendation to form an independent commission to recommend a new national banking sector strategy.
According to a media report published on Friday, the central bank is going to allow the rescheduling facility for Beximco, which was in 2015 granted similar scope on condition that no further rescheduling would be applicable to the business entity and other similar beneficiaries.
The report said Bangladesh Bank is reneging on its own position apparently under pressure. In the statement, TIB Executive Director Iftekharuzzaman called upon the government to acknowledge the deep crisis in the banking sector and form an independent banking sector reform commission to develop a national strategy to address the deepening crisis.
"Loan defaulters… cannot be allowed to dictate terms to BB and cause non-compliance of its own policy-decision to get illegitimate extension of endless privileges of rescheduling, nor can BB allow itself to be held hostage and continue to accumulate ever greater risks to the sector," he said.
Iftekharuzzaman said the central bank should have the courage to play its entrusted role in national interest. The statement said the fresh rescheduling of Beximco loan will set yet another 'extremely bad precedence' and undermine the credibility of the central bank.
"It will open floodgates of further similar compromises and only deepen the ongoing crisis in the financial sector in general and banking sector in particular," it said.
Iftekharuzzaman said, "The reported rescheduling of the loan is particularly ominous for the economy at a time when the state is reportedly starving for cash and the Government is resorting to a legal provision to go for an unprecedented type of borrowing from public and autonomous institutions."
"If conscious of public interest, the BB cannot afford [to] continue to protect and grant impunity to loan defaulters, nor can it further institutionalize the default culture and continue to shift the burden of this menace on the people," he said.
The TIB chief reiterated the call upon the government to form a fully independent committee of experts consisting of reputed, independent and credible specialists to analyze the deepening crisis in the sector and recommend short-, medium- and long-term strategy to address it.
He said the situation may become absolutely unmanageable causing the bubble of high growth to burst if Bangladesh fails to address the 'crisis'.
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