Published:  04:18 AM, 01 December 2019

Banks on way to rescheduling loans

Banks on way to rescheduling loans

A large portion of bank loans are not being returned. As a result, the number of load defaulters is constantly on the rise. Bangladesh Bank has published a list of loan defaulters, but according to some experts, the real number of load defaulters is way more than that.

Besides, the banks are not enlisting those who have taken out larger amounts of loan from them as defaulters even though they have failed to return the money. Bangladesh Bank has been appreciative of those banks which managed to show a small number of loan defaulters on paper.

On the other hand, banks which are accustomed to following rules are now thinking in terms of loan rescheduling.   "If we fail to collect the loan money, we are forced to erase the names of some loan defaulters," said the Managing Director and CEO of a private bank, according to a report in Bangla Tribune.

He further said, "We offer various types of offers to the loan takers in order to collect the loan money. We sometimes reschedule the time for loans to be returned for the defaulters in line with Bangladesh Bank directives."

However, according to some economists, the banks are hiding the actual list of loan defaulters and concealing other related information to keep a clean image in public. 

Regarding the issue, former Governor of Bangladesh Bank Dr Salehuddin Ahmed said, "Failing to collect defaulted loans is a weakness for any bank.

As a matter of fact, some banks do not verify customer information before giving them loans. And Bangladesh Bank is not taking necessary measures regarding the situation. As a consequence, banks are not revealing the real picture of defaulted loans."

There are reports that customers regularly reschedule their loan returning dates so as not to get enlisted as defaulters. In 2013, the rules for loan rescheduling were made flexible considering the then unstable political situation. Since then most customers have wanted to reschedule their loan return dates.

According to the latest rules, defaulters can reschedule their loan return by submitting two percent of down payment only. After rescheduling, they are allowed to return money within a period of 10 years.   

As per the updated Bangladesh Bank information, Tk 1,28,568 crore in loans were rescheduled in the banking sector in the last six years (from 2013 to 2019). Of the amount, in the first six months of 2019, loans worth TK 21,308 crore were rescheduled.

Meanwhile, despite various offers given to the loan takers, the number of loan defaulters is still on the rise. Currently, the amount of defaulted loans amounts to TK 1,16,288 crore, which is 11.99 percent of the total loans.

However, as per an International Monetary Fund (IMF) report, the actual amount of defaulted loans is more than 2 lakh 40 thousand crore taka. In addition, loans amounting to Tk 40,426 crore were written off till June this year. 

On the other hand, one lakh 28 thousand and 500 crore taka was added as bad loan. Now the amount of defaulted loans stands at two lakh 96 thousand and 419 crore taka.

The defaulted loans, written off, re-scheduled and re-structured loans have led to a precarious situation. The central bank is also concerned about the non-performing loans.

Recently, Bangladesh Bank called a meeting, chaired by its governor Fazle Kabir, to put an end to the dilemma. Some 30 high officials of the central bank attended the meeting. ***

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