BANGLADESH BANK suggests new law to curb withful defaulters

Bangladesh Bank has proposed a default loan law which will hold bank
officials responsible if the amount of default loan rises in the
commercial banks. Besides, the law will offer the sick industry
defaulters' special waiver of their default amounts. The central
bank has proposed the default loan law to cut number of the wilful
defaulters. 'We have already sent the proposed law to the finance
ministry for their review,' said a senior official of the central
bank. The official said the finance ministry also formed an
'Executive Council' to devise a way out for the sick industry
defaulters. The sources said the central bank prepared the new
default loan law following an instruction of finance minister AMA
Muhith to the central bank for a new law to check intentional loan
defaulters. According to the proposed law, the central bank will
be able to take legal action against the bank officials in case of
their failure to reduce the loan defaults. Under the proposed law,
the amount of the default loan will have to be rescheduled within
one month. In the case of default loan of the sick industry, the
government will give up to Tk 10 lakh rebate to the owner of the sick
industries. Condition of cost recovery rate and down payment of
sick industry will be relaxed for loan defaulters of the sick
industries. Besides, the central bank will introduce online
programme with the commercial banks for updating the Credit
Information Bureau their default loan status. According to the
existing rule, the CIB gets default loan information from the
commercial banks on monthly basis.