Enough scope for deliberate defaulters to reschedule loans

Former BB governor Farashuddin tells a seminar

| Updated: February 12, 2023 20:47:45

Illustrative image Illustrative image

Many deliberate defaulters have got scope to reschedule their loans again and again with undue grace from banks, causing a setback to the financial sector, said a former governor of the country's central bank.

However, those who became defaulters unintentionally, were not given enough scope, former Bangladesh Bank (BB) governor Mohammed Farashuddin said at a seminar on Tuesday evening.

"Many habitual defaulters got the scope to reschedule their loans only at two per cent (of down payment) and up to 9-10 times," he said.

Even there was a tendency to woo the business people, who were declared top defaulters by the country's Supreme Court, he said.

The economist made the remarks as the chief guest at the seminar, titled 'Bangladesh Economy-Recent Challenges & Way Forward', organised by the Institute of Cost and Management Accountants of Bangladesh (ICMAB) at its headquarters in the city's Nilkhet area.

ICMAB President Abdur Rahman Khan presided over the function, while Managing Director and Chief Executive Officer (CEO) of NCC Bank Mohammad Mamdudur Rashid was present as the session chair.

Former president and council member of ICMAB and Vice Chairman of Shanta Asset Management Limited Arif Khan was the keynote speaker at the seminar.

Managing Director of Probashi Kalyan Bank Mazibur Rahman and former president and council member of the ICMAB Mohammed Salim were also present on the occasion, among others.

In his speech, Mr Farashuddin further said the country's economy has now become a $450 billion one, which was said to be a bottomless basket after the country's independence. "The country has made continuously positive GDP growth year after year."

There should be one exchange rate of US dollar in the economy, he said, adding that ensuring fair competition in a market economy brings in good results.

"Our economy needs to be a multi-diversified one varying from agriculture to industry," he said, adding that there is also the necessity of industry and export diversification.

The micro and small entrepreneurs should get access to low-cost finance, including venture capital, to make a positive impact on the economy, he said.

Investment in the country's education, skills-based training, and human resources development is also essential.

"Despite the existing challenges, I am intensely hopeful about the country's economy as it has tackled the Covid-19 effect," added the economist.

In the keynote presentation, Mr Arif Khan said Bangladesh's economy is well connected with the global economy, implying that it gets affected by global situations like the Russia-Ukraine war.

Despite the ongoing crisis, including inflation and depletion of foreign currency, Bangladesh's economy is still in a better position compared to its neighbouring countries. "All the countries are now facing local currency depreciation against the US Dollar."

The government needs to check unofficial trade of dollars, he said.

It is facing challenges like prevailing current account deficit, depletion of forex, depreciation of local currency and high commodity price, he added.

The paper suggested short-term remedies, for instance, rationalisation of interest rate and market-driven exchange rate.

Mr Khan suggested preventing the import of unnecessary goods as the process ultimately affects the poor people by raising their cost of living further depreciating the local currency.

Speaking on the occasion, ICMAB president said the cost and management accounting (CMA) professionals are making contributions to the country's economy in various ways.

The CMA professionals focus on business data analysis, forecast and budget to help leaders make decisions, and create reports to be internally used, he said.

The vision of the ICMAB is to help Bangladesh become an industrialised nation by promoting and regulating cost and management accounting to enhance economic competitiveness and quality of life, he told the seminar.

[email protected]

Share if you like

Filter By Topic