Staff Reporter :
The amount of defaulted loans in the country exceeds Tk2 lakh crore, despite central bank data indicating it is Tk1.82 lakh crore, according to former Bangladesh Bank governor Dr. Mohammad Farasuddin.
Criticizing the waiving of interest on loans for defaulters, Dr. Farasuddin said, “Government banks have waived Tk50,000 crore in interest on defaulted loans. This should be considered as defaulted loans.”
Dr. Farasuddin made these remarks while speaking as the chief guest at a shadow parliament debate on the budget for the current fiscal year (2024-25).
Debate for Democracy Chairman Hasan Ahmed Chowdhury Kiran presided over the event at the Bangladesh Film Development Corporation in the capital on Friday.
He added, “In the budget, the government should reduce its reliance on borrowing from banks and emphasize borrowing from savings bonds. Investment will stagnate further as private investors will not get loans if the government borrows more from banks.”
“On the other hand, if the government takes loans from savings bonds, it will reduce inflationary pressure and strengthen social security,” he said.
The former governor noted that the influence of the IMF on the current fiscal year’s budget led to a lack of directives to recover smuggled money.
“If the trends of money laundering, corruption, and defaulting are not stopped, they will pose a threat to the government,” Dr. Farasuddin warned.
He also stressed the need for a sustainable and transparent anti-corruption drive to encourage people to pay taxes, stating, “Tax evasion must be prevented. A survey indicates that 27 lakh people in the country are very rich, yet only 9 lakh pay taxes.”
Dr. Farasuddin further stated, “Current inflation is reported at 9 percent, but it is actually close to 10 percent. The budget speech aims to bring inflation down to 6.5 percent, but this will not be achieved.”
Recalling the 1974 famine, he said, “Many people died of starvation in 1974 as middlemen created artificial shortages of stocks and supplies. A balance needs to be maintained between stock and supply.”
He also pointed out that the government plans to borrow Tk96,000 crore from foreign sources for the current fiscal year. “This can be a very harmful approach. Instead, the government should focus on borrowing from savings bonds and reduce its debt dependence on both domestic and foreign sources.”
In the shadow parliament titled “This year’s budget will help in sustainable development,” debaters from Jagannath University defeated debaters from Comilla Victoria Government College.
