Bank debt default rate will not increase, says Finance Minister Kamal

Finance Minister AHM Mustafa Kamal has announced that the bank loan default figure will not increase “by a single taka”.

The new finance minister made the announcement at a news conference after a meeting with bank owners and chief executives in Dhaka on Thursday.

“I had set a pre-condition for the meeting that default loan cannot increase by a single taka. It is up to you (banks) how you will manage it,” he said. 

“They have assured me of this. So, loan default will not hopefully increase from today,” he added. 

Kamal also claimed 11-12 percent non-performing loan in banks is “manageable” and the figure was lower in Bangladesh than in many other countries.

“Those who came to the meeting assured me that default loans won’t rise. They will rather push default loans down,” he said.

Bank loan default totalled Tk 993.7 billion as of September last year, according to the Bangladesh Bank.

The figure was on top of around Tk 350 billion in bad debt being written off.

Despite achievements in different financial indexes, the amount of default loan increased around 4.5 folds in the two consecutive terms of the Awami League government.

AMA Muhith, the finance minister of the last government, had admitted that default loan was a big problem in Bangladesh’s banking sector.

He had also said he would make a report for the new government so that it could tackle the issue, but it was unclear if such a report had been filed.