The Bangladesh Association of Banks (BAB) on Wednesday urged the Bangladesh Bank to address regulatory loopholes, particularly the practice of borrowers filing writ petitions to avoid being classified as loan defaulters.
The appeal was made at a meeting with central bank officials led by governor Ahsan H Mansur, according to BB spokesperson and executive director Husne Ara Shikha.
BAB also requested that the governor consult with them during the policy-making process.
The association also called for reforms to the Artha Rin Adalat (money loan court) and the removal of barriers to selling collateral after borrowers鈥� defaulting, she said.
Following the meeting, newly appointed BAB chairman Abdul Hai Sarker observed that legal gaps were hindering the recovery of non-performing loans.
He stated, 鈥業f the law is strengthened, I believe we could recover 60 per cent of the NPLs, as most of the defaulters are willful defaulters.鈥�
Addressing concerns about liquidity shortages, Abdul Hai said that 8-9 banks might face liquidity challenges, but he emphasised that not all banks were affected.
鈥楾he governor is aware of the situation,鈥� he said, adding that the sector鈥檚 management was improving and significant changes would occur within six months.
When asked about Islamic Shariah-based banks seeking loans from traditional banks, BAB vice-chairman and First Security Islami Bank chairman Mohammad Abdul Mannan stated that discussions were ongoing with the central bank and other banks.
鈥極ne-third of the banking system operates under Islamic principles. While there are challenges, I believe these are temporary,鈥� he added.
