Wilful bank loan defaulters are still enjoying legal and regulatory protection, as authorities concerned shield them from punitive measures, allowing them to evade consequences, according to bankers.
Wilful default occurs when borrowers deliberately refuse to repay loans despite having the means to do so, exacerbating the country鈥檚 staggering level of non-performing loans, they said.
The Bangladesh Bank has refused to disclose the names of wilful defaulters to the media and has not sent those to different agencies concerned, citing legal barriers.
BB executive director Husne Ara Shikha, also the spokesperson for the central bank, told 抖阴精品,
鈥楢ccording to article 46 of the Bangladesh Bank Order 1972, credit information is confidential. We can only provide parliament with credit information such as defaulters鈥� list or wilful defaulters鈥� list or others. That is due to legal barriers we can鈥檛 share wilful defaulters鈥� list or can鈥檛 make the list public.鈥�
On March 12, 2024, the Bangladesh Bank, however, had issued a circular stating that it would forward the list of wilful loan defaulters to government agencies to enforce restrictions on their foreign travel, business licensing and company registration.
These defaulters were also supposed to be blacklisted, barring them from receiving government awards or recognition.
The central bank was also supposed to notify registration authorities for cars, land, homes and flats to prevent the defaulters from acquiring assets.
However, the central bank has so far sent no names or lists of names of wilful defaulters to any government agencies, BB officials said.
No action has been taken against any wilful defaulters, they said.
Instead, many wilful defaulters secured court orders to remove their names from the list, they added.
Mustafa K Mujeri, executive director of the Institute for Inclusive Finance and Development, has accused the central bank of protecting wilful loan defaulters by concealing their identities and failing to share the list of the defaulters with relevant government agencies for necessary action.
He told 抖阴精品 that the Bangladesh Bank should have scrutinised the names of defaulters flagged by banks as wilful and taken strict measures in line with regulations.
Such actions, he argued, would serve as a deterrent, discouraging others from defaulting intentionally in future.
鈥楬owever, the central bank is not fulfilling its responsibilities,鈥� Mujeri observed.
He insisted that the names of wilful defaulters must be made public, as the list should not be treated as confidential.
鈥楾he public has the rights to know who these defaulters are,鈥� he added.
Mujeri also said that the ousted Awami League-led regime had also shielded loan defaulters, a practice, he said, had pushed the banking sector into its current fragile state.
He expressed disappointment that even after the fall of the AL-led government on August 5, 2024, the same culture of secrecy and protection for defaulters persisted.
鈥業t is very unfortunate that the practice of hiding and protecting defaulters continues,鈥� Mujeri remarked, stressing the urgent need for transparency and accountability to restore confidence in the country鈥檚 banking system.
Masrur Reaz, chairman of the Policy Exchange Bangladesh, has called for stringent measures against wilful defaulters, accusing them of looting public money from banks.
He emphasised that the central bank had previously pledged to take action against such defaulters and expressed hope that these promises would now be translated into concrete steps.
鈥榃e expect the Bangladesh Bank will take decisive measures and hold these defaulters accountable without any further delay,鈥� Reaz stated, underscoring the urgency of addressing the issue to restore the public trust in the banking sector.
Through March 12 circular, banks were instructed to report wilful defaulters to the Bangladesh Bank鈥檚 Credit Information Bureau, which would mark them as 鈥榃D鈥� in its database. These instructions took effect on July 1, 2024.
Since then, banks have identified and reported numerous wilful defaulters, yet the Bangladesh Bank has taken no action, allowing these criminals to continue their financial misdeeds with impunity, bankers said.
Bangladesh Bank data showed that the amount of non-performing loans in the country鈥� banking sector shot up by more than Tk 1 lakh crore to Tk聽2,84,977 crore in September 2024 from Tk聽1,82,295 crore at the end of March.
About 17 per cent of the total bank loans worth Tk聽16.82 lakh crore was classified as non-performing, the highest in South Asia.
Two business groups, S Alam Group and Beximco Group, had exploited the banking sector, withdrawing loans worth Tk聽2.25 lakh crore and Tk聽50,000 crore respectively, in their names and anonymously during the ousted AL regime. These loans have started becoming defaulted, further straining the financial system.
The BB circular stipulated that wilful defaulters would not be allowed to hold directorship in financial institutions. If defaulters fail to repay within two months of receiving notice, banks concerned must file criminal charges against them. Non-compliant banks would face penalties ranging from Tk聽50 lakh to Tk聽1 crore.