The Bangladesh Bank on Wednesday asked the country鈥檚 non-bank financial institutions to form unit by April 30 for identifying wilful loan defaulters as per the central bank鈥檚 guidelines.
The BB issued a circular titled 鈥業dentification and finalisation of wilful defaulters and measures to be taken against them鈥� on the day.
Earlier on March 12, the central bank instructed the country鈥檚 banks to form such unit by April 9.
The NBFIs must identify them as per definition of wilful defaulters.
According to the circular, once a customer turns into a loan defaulter, the NBFI unit must identify whether the client was wilful loan defaulter or not within 30 days.
A borrower will be wilful defaulter if they fail to repay loan or investments or any other financial facility taken in favour of them or their family members, related companies or financial institutions, despite having the capacity to repay.
If a person takes loans in favour of the individual or his/her family member and his/her related company by intimidation or by providing false information, he/she will be identified as wilful loan defaulter.
Besides, if the individual use the loans in purposes other than those for which the loan was received and if the collaterals used for taking loans were transferred without the prior approval of the NBFI, he/she will be identified as wilful defaulter, the circular said.
The central bank in the circular observed that defaulted loans are one of the major obstacles to the country鈥檚 economic development and loan management.
Proper identification of wilful loan defaulters and taking appropriate measures against them will help maintain the overall loan portfolio quality, including reducing classified loans, and enhance financial discipline and efficiency.
This will have a positive impact on capital, income, profit, liquidity and stability, making the overall economic activities more dynamic, the BB said.
The BB will send the list of wilful defaulters to the respective government agencies to impose restriction on foreign travel, getting trade licence and registration for company.
The wilful defaulters will not receive government鈥檚 award or recognition.
The central bank will also send the list to car, land, home and flat registration authorities to take necessary actions, the BB circular said.
The wilful defaulters cannot be a director in any financial institutions in the country and his/her directorship will be announced vacant.
If the wilful defaulter fails to pay loans in two months of getting notice from the NBFI concerned, the NBFI must file criminal case against the borrower.
The NBFI cannot waive interests imposed on their loans taken by the wilful defaulters and the loans cannot be rescheduled.
If a NBFI does not comply with these instructions, the central bank will impose Tk聽50 lakh to Tk聽1 crore in fine on it.
The NBFIs will report to the BB鈥檚 credit information bureau department after identifying and finalising the wilful loan defaulters and the CIB will display them in their database as WD.
The instructions will be effective from July 1, 2024.
The central bank in a separate circular on Wednesday said that if a company of a group was identified as wilful defaulter, other companies under the group can get loans from banks after getting prior approval from the Bangladesh Bank.
However, the group must adjust or regularise the defaulted loan of its company within one year.
If it fails to do so or became defaulted after regularising the defaulted loans, no companies under the group will get new loans, the circular said.
The amount of defaulted loans in banks reached Tk聽1.45 lakh crore in December, 2023 and that in non-bank financial institutions Tk聽19,951 crore in June 2023.
