Bangladesh Bank sets 11-point roadmap to realise default loans

Bangladesh Bank (BB) has set a harsh 11-point roadmap to realise default loans and ensure good governance in bank operations.

The central bank board meeting on Sunday approved this roadmap for establishing good corporate governance in banks along with a guideline for reducing huge amounts of default loans, Deputy Governor of BB Abu Farah Md Nasser told UNB. 

The BB governor Abdur Rouf Talukder presided over the meeting.

Nasser said that the defaulters would be deprived of various benefits, such as disqualification from buying new land, house, car, or even opening a new business.

“The board of directors has taken such a harsh decision to reduce overall defaulted loans to 8 per cent, state-owned bank defaulted loans ratio to reduce by 10 per cent and 5 per cent respectively, and reduce fraud, disguise, and limit cross loan disbursement to zero level,” said Nasser.

The BB introduced a new rule to keep 100 per cent provision before the write-off loan defaulted for 2 years from the 3 years. As a result, the Tk 433 billion (43300 crore) bad loans will be reduced.

A bank has to form a unit in coordination with the bank’s managing director to realise the write-off loans, he said.

The stressed asset (defaulted loans) is to be shown on a separate balance sheet until the realisation of the loan.