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ADR can bring NPL to tolerable level, experts

Published: February 28, 2018 21:19:46 | Updated: March 01, 2018 12:07:31


Representational image (Collected)

The Alternative Dispute Regulation (ADR) is essential in the commercial sector, including banks, to settle a large number of pending disputes and reduce a huge amount of Non-Performing Loan (NPL).

Experts said that the ADR is gradually becoming a popular process to settle the huge number of cases in the banking sector and to bring the NPL to a tolerable level.

"ADR is that mechanism which resolves disputes more efficiently and amiably by finding the self-made process best suited to the parties," Additional Managing Director of MTB M Hashem Chowdhury said.

Around 3.10 million cases are pending in the country, of which 1.30 million are commercial, the Mutual Trust Bank (MTB) AMD said.

According to the Bangladesh Bank's latest data, out of the total outstanding loans of around Tk 7.53 trillion, the amount of NPL was Tk 803.07 billion till September 2017.

The percentage share of classified loan in total outstanding was 10.67 per cent, the data showed.

To settle the huge cases, he said, the authorities concerned will have to take immediate steps to accelerate the ADR process, reports BSS.

"It is the method where disputants can participate in the solution finding process, so ADR can't be substitute of formal judicial system but can complement and support it," Chowdhury added.

In Malaysia, around 99 per cent cases are settled through the ADR process, the senior banker said.

In the Netherlands, 95 per cent cases are settled through the process, he said.

"The USA, the UK, the Netherlands and Malaysia once were at the stage where we are today. But for welcoming ADR, the mentioned countries have come out of the tangle," he added.

SM Aminur Rahman, adviser of the Union Bank Limited, said the authorities concerned will have to accelerate the process as it can bring a satisfactory solution among the parties to the dispute.

M Saiful Islam, Alluring Fashions Chairman, said, "Through the ADR process, a huge number of pending cases will be settled and the financial sector will go to a better position."

A Bangladesh Bank senior official said the central bank is taking necessary steps to accelerate the ADR process for reducing NPL.

The BB official urged all commercial banks, including Islami Bank Bangladesh Limited (IBBL) and Rupali Bank and Pubali Bank, to come forward for settling their cases under the ADR process.

The official hoped that the amount of NPL will come down to a tolerable level under the ADR process.

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