Stability in financial sector depends on defaulted loans recovery: Experts

Staff Reporter :
The businesses and economists have said that stability in the country’s financial sector will not come, unless the defaulted loans can be reduced.
Those, who are involved in defaulting, are politically benefited and economically influential. So, it will not be possible to reduce the non-performing loans without political willingness, they added.
They came up with the observations while speaking at a seminar on “Bi-annual economic state and future outlook of Bangladesh economy: Private sector perspective” organized by the Dhaka Chamber of Commerce & Industry (DCCI) at its head office in the city on Thursday.
Speaking at the seminar, the Commerce Ministry’s Senior Secretary Tapan Kanti Ghosh, however, said, “The responsibility of defaulted loans should not be given only to the government as the private banks also give such loans knowingly.”
Dr Selim Raihan, Executive Director of South Asian Network on Economic Modeling (SANEM), said, “The finance minister has promised several times to reduce defaulted loans. But, the loans are increasing. Because, we may have understood the problem, but we are walking the opposite way to resolve.”
Raising question on why the loan defaulters remained unpunished, he said, “Politically and economically influential people exert various influences on defaults.”
Claiming the country is currently passing through a critical time financially, he said, “A strong political decision against the loan defaulters are needed under this situation.” “For a long time, we could not take the right decision regarding interest rate and exchange rate. Limits on interest rates are imposed without judgment,” the economist said.
“When it (the default trend) started, if we could have given exemplary punishment, we would not have to face this situation,” Syed Mahbubur Rahman, Managing Director & CEO of Mutual Trust Bank, said adding, “Political decision must to stop it.”
In the keynote paper, DCCI President Sameer Sattar also said that taking stern measures for quick loan recovery to curb the NPLs
He further said the country needs to go for product diversification, strengthening backward linkage industries, skill development and technological efficiency to get benefit in the post-LDC era.
He also underscored for proper implementation of monetary policy, creating a business-friendly environment, necessary policy reforms and a separate ‘Agro-Industrial zone’ to attract foreign investors.
“We need to go for massive value addition to get duty benefit and for this, we need to strengthen and enhance backward linkage industry,” he added.
He also said that product diversification will play a catalyst role to cater better export market share for Bangladesh in the post-LDC era. BIDA Secretary Mohsina Yasmin and PHP Family Director Mohammad Ali Hossain, among others, spoke on the occasion.