HC intervention timely

We thank the High Court (HC) for speaking out on the issue when it observed that the BB has been working in favour of loan defaulters; which has been in the public mind for a long time that undue privileges are being given to large-scale loan defaulters whilst penalising smaller ones. The court stated at a hearing on a writ petition that “another Tk 100,000 crore may be laundered from the country if the big loan defaulters are given further opportunity to get bank loans in line with Bangladesh Bank’s May 16 circular.” The continued largesse being shown by BB to allow loan defaulters to reschedule their loans with a repayment period of 10 years and down payment of a measly two percent merely goes to show that the central bank has caved in to extraneous pressures. Such policies will only encourage the culture of default.

The HC has put a hold on the latest BB circular till June 23 and that is a step in the right direction. While smaller loan defaulters are mandated an interest rate ranging from 14 to 15 percent, why should the mega defaulters be treated with such lax terms? We have pointed out several times that the banking reforms recommended by various probe committees in the aftermath of major banking scandals have not been implemented per this fact, precisely how would such facility given to the large defaulters bear fruit?

The central bank is an independent authority but its operation has been hamstrung by external influence over the years. The finance ministry ought to be helping the BB to curb the loan default culture instead of acquiescing to it. Big loan defaulters need to be made to answer for their deeds and not be given favours.