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LOAN RESCHEDULING: New policy to cheer up defaulters: Menon

Workers Party of Bangladesh President Rashed Khan Menon has demanded that the Bangladesh Bank’s recent loan rescheduling policy be suspended for it acted as an encouragement for defaulters.

“The policy was issued without any prior discussion and was based on the finance ministry’s order,” he said. It is unknown why the BB complied with the order, he added.

Menon was addressing a discussion the party organised in the National Press Club demanding clear commitments in the upcoming budget for stopping corruption, defaulting of loans and anarchy in the banking sector.            

Issued last week, the new facilities give loan defaulters a lifeline, allowing to regularise loans with a down payment of only 2 percent instead of the existing 10-50 percent.

Moreover, a maximum 9 percent interest will be charged on the rescheduled loans. The existing rate is 12-16 percent.

The new policy drew immense criticism, mounting fears of further deterioration of the banking sector’s financial health.

Menon said three to four banks including Islami Bank, Union Bank and First Security Islami Bank remained under the grip of one person.

Word gets around that one day that person fell sick and went to Singapore for treatment, creating apprehension in the central bank that disaster will strike the banking sector should an accident befall that person, he said.

He said the Bank Company Act was amended just to allow more family members of bank owners into the board.

The family members are not the owners — they are only sponsor directors. General people are the original owner and the amendment came about without their consent, added Menon.

The share market was not allowed to develop and some fake companies have been allowed to raise capital through initial public offerings, he added.

Menon said the government was allowing rice import despite surplus production at home, resulting in farmers not getting fair prices. Rice imports are not being restricted to promote money laundering through under- and over-invoicing, he claimed.