Review of written-off loans on card

DOT Desk: Finance minister AHM Mustafa Kamal said loans written-off since its inception will be reviewed to know the reasons why those cannot be recovered, reports The New Age.
A strong committee to be appointed to verify pros and cons of the loan written-off process and lapses, if any, by the government officials for recovering those, he said after a meeting with the officials of the financial institutions division officials at secretariat.
Kamal, however, assured that the government would not be harsh to any officials.
As of October, the amount of written-off loans since 2003, when the policy was introduced, stood at Tk 48,890 crore.
According to Bangladesh Bank data, growing number of banks have resorted to writing off loans in an effort to clean up balance sheets.
Between the months of April and June, the amount of loans written off by bankers stood at Tk 615 crore, an increase of 4.36 times from three months earlier.
Kamal hinted at bringing about changes in the bank company act to bolster the bad loan recovery process.
Changes in the laws and rules were imperative to overcome writs filed by defaulters, he noted. He hoped that high-flying non-performing loan could be checked successfully by revisiting the present laws and rules.
Bad loans in the country’s banking system have increased to around Tk 1,00,000 crore amid a lack of political commitment for recovering defaulted loans.
By the end of September this fiscal year, defaulted loans rose to Tk 99,370 crore, 11.48 per cent of Tk 8,65,930 crore total outstanding loans in the country’s banking system, according to Bangladesh Bank’s latest data.
As of September, defaulted loans in six state-own commercial banks — Sonali, Agrani, Janata, Rupali, BASIC and Bangladesh Development Banks — stood at Tk 48,080 crore or around 48 per cent of the bad loans.
Kamal said he was giving priority to the banking sector mostly because of its importance to the economy.
He expected a turn-around in the banking sector in the shortest possible time.
Earlier on the day Kamal had an introductory meeting with the officials of the economic relations division at the Planning Commission.
He directed them to mobilise small loans from the donors and utilise those in projects for improvement livelihood of the rural mass.