Bangladesh Bank seeks info on top loan defaulters

Bangladesh Bank has sought information from the banks on the top loan defaulters of the past 14 years.

The central bank’s Banking Regulation and Policy Department recently wrote to the banks, asking them to provide the details within May 31.

BB officials say Finance Minister AMA Muhith may raise the issue while presenting the budget for the 2015-16 fiscal year in June.

Every bank has been asked to give information about each year's top 50 loan defaulters from 2001 to 2014.

This means, each bank will have to send information on at least 700 loan defaulters.

The central bank asked not to include anyone’s name on two lists.

It sent a set of instruction on the information to be provided.

The banks will have to send 23 types of information on loans and the defaulters, including their names, size of loans taken, and amount of interest and rescheduling.

A Bangladesh Bank official, requesting anonymity, told bdnews24.com that the finance minister, facing criticism over unpaid loans, is considering the publication of a White Paper on loan defaulters.

He sought information on them for this, he said.

“But not every information can be published abiding by the law,” he said.

For this reason, the central bank sought information on top 50 loan defaulters every year, he said.

“It will forward the information to the government, which will take the next decision,” he added.

Asked why details from 2001 had been sought, the BB official said 2001 was the base year, being the first year of the century.

“Also,” he added, “the BNP, caretaker and Awami League governments were in power during this period. So, the loan situation under the various governments will become clear.”

In April, Finance Minister Muhith suggested to Bangladesh Bank Governor Atiur Rahman the publication of the White Paper and sought information on the loan defaulters.

In the letter, he said there had been an outcry in Parliament over unpaid loans.

“Many of the MPs alleged that big defaulters get big benefits. They think a White Paper can be published over the issue.”

The finance minister said he, too, thought that ‘some specific’ information could be published for the sake of transparency.

In November last year, Muhith sought updated information on unpaid loans from the Bank and Financial Institutions Division.

According to latest data collected by the central bank, the total unpaid loans were roughly Tk 546.58 billion until March, which is 10.47 percent of the total loans disbursed.

Most of the unpaid loans have been marked as bad, which means there is little chance of their recovery. This type of loan was nearly worth Tk 421.59 billion.

Until December last year, the unpaid loan in the banking sector was Tk 501.56 billion, which was 9.69 percent of the loans disbursed until then.

The Bangladesh Bank is trying to keep the amount of unpaid loans within 10 percent.

It gave businesses harmed by political turmoil the chance to reschedule loans they took at low down payments.