‘Banks’ default loans surpass Tk 4 lakh crore’
Staff Reporter :
Eminent economist and academician professor Muinul Islam said the actual amount of defaulted loans in the banking sector has exceeded Tk four lakh crore.
Out of the actual amount, nearly half of the amount is stuck in lawsuits over the years and not shown as defaults on the balance sheets of banks because, as long as the cases continue, it will not be considered as default loans.
The former professor of Chittagong University also said adding Tk 55 thousand crore written off defaulted with the amount under lawsuits, the amount of defaulted loans will become more than Tk four lakh crore.
At the end of March this year NPLs stood at Tk 1,31,620 crore or 8.80 per cent of the total disbursed loans according to data from Bangladesh Bank.
The Ekushey Padak awarded economist, Muinul Islam revealed these information in the webinar titled ‘Why the crisis in the banking sector of Bangladesh, how to solve it’ organized by Forum for Bangladesh Studies on Saturday.
The former President of Bangladesh Economic Association Dr. Islam said, “In the banking sector, there is an economy of looting in the country under the government’s patronage. The biggest problem with the loot economy is defaulted loans.”
He also mentioned his work on “Non-performing loans in the private sector of Bangladesh” where he found 77 percent of non-performing loans are due to political patronage.
Referring to the experience of researching defaulted loans for 30 years, Muinul Islam said, “I have seen that the government’s approach is to patron and provide benefits to the defaulters which remarkably increased after 2019. “
Addressing the country’s current macroeconomic instability in the webinar Muinul Islam mentioned Capital flight is responsible for the foreign exchange reserve crisis.
He also expressed the value of Taka has depreciated by 25 percent, causing rampant inflation in Bangladesh.
Dr. Islam viewed that the robbery in the banking sector is the protagonist of the all economic crisis country facing.
The program was moderated by the prominent analyst Zaheed Ur Rahman , the panelists included Mamun Rashid, Managing Partner of PwC Bangladesh and former CEO of Citibank NA and Shawkat Hossain, Head of Prothom Alo Online.
Zia Hasan, project researcher of the German Federal Ministry of Education and Research, gave the closing remarks.
