2024-03-13 06:22:12
Bangladesh Bank is getting tough to catch the willful defaulters in the banking sector. The central bank has issued new instructions to catch such defaulters.
According to the instructions, action will be taken against the willful defaulters from July 1, the bank will be fined if the instructions are violated. On Tuesday (March 12), the Banking Regulation and Policy Department issued a directive in this regard.
According to the guidelines, if a defaulting customer takes a loan anonymously and misuses that loan, it will be considered a willful defaulter. The Central Bank has directed the banks to form ‘Willful Defaulter Identification Unit’ by April 9 to identify willful defaulters. At the same time, measures will be taken against willful defaulters from July 1 and the bank will have to pay fine if they violate the instructions.
Willful defaulting borrower association means any defaulting borrower person, institution or company who has taken loans, advances, investments from any bank-company or financial institution in favor of himself, his family members, interested persons, institutions or companies. or does not pay any other financial benefit or part thereof or the interest or profit charged thereon in spite of his ability.
Receives loan, advance, investment or any other financial benefit from any bank company or financial institution in the name of himself, his family member, interested person, institution or company by providing fraud, deception or false information from any bank company or financial institution. has taken a loan, advance, investment or any other financial facility for any purpose other than that for which he has used the said loan, advance, investment or financial facility or part thereof, any bank-company providing security loan or advance against the loan or advance or Transferred or transferred without the prior written consent of the financial institution.
According to the instructions, section 27B of the Act provides for the list of willful defaulters, etc. Non-performing loans are one of the main obstacles to the economic growth of the country and the debt management of the banking sector. If the willful defaulters are identified and appropriate action is taken against them, it will be possible to maintain the credit discipline of the banking sector and increase the efficiency and capacity of the banking sector along with the reduction of classified loans.
Within 30 days after a borrower is identified as a defaulter, the relevant unit of the bank should review and identify the factors to determine whether the borrower is willful or not. If identification is not possible within this period, another 30 days will be available with the approval of the Managing Director/Chief Executive Officer of the Bank. If identified as a willful defaulter, the concerned borrower shall be given 14 working days to present his statement stating the reasons for the identification.
Actions to be taken against willful defaulting borrowers:
Willful defaulting borrowers will be listed for ban on foreign travel, ban on issue of trade license and ban on company registration with Bangladesh Securities and Exchange Commission and Registrar of Joint Stock Companies and Firms-RJSC. The willful defaulter will not be eligible for any state award or honor, the registration of vehicle, land, house, flat etc. will be sent to the authority by Bangladesh Bank. In this case the concerned authorities will take appropriate action under their existing laws/rules. If a borrower is listed as a willful defaulter by any bank or financial institution, then the concerned borrower will be disqualified from being a director of any bank or financial institution for a period of 5 years after being exempted from this list by repaying the loan.
If a director of a bank or financial institution is listed as a willful defaulter, his directorship will be declared vacant by Bangladesh Bank subject to the provisions of 27B (8) of the Bank Companies Act, 1991.
No other bank or financial institution can take over the customer’s loan account if a defaulter is finalized as a willful defaulter. The concerned borrower shall be treated as a willful defaulter until the loan taken by the willful defaulter is fully recovered or repaid.
If any bank knowingly or willfully violates this directive, under the Bank Companies Act, 1991, the concerned bank will be fined not less than 50 lakhs and not more than 1 crore rupees. If the violation of this directive continues, the concerned bank will have to pay an additional penalty of Tk 1 lakh every day.
Note that according to the data of Bangladesh Bank, at the end of last December, the defaulted loans in the banking sector were 1 lakh 45 thousand 633 crores, which is 9 percent of the disbursed loans.