State of the Bangladesh Economy in FY2023-24 (First Reading)
Independent Review of
RBD
Bangladesh's Development
Reasons behind high volume of
Non-performing Loans (NPLs) in Bangladesh
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Institutional
Appointments of bank
directors, often based on
political connections
Loans sanctioned on
political grounds
Rescheduling of loans
despite poor record of
repayment
Writing off loans to
reduce tax burden and
clean balance sheets of
banks
Weak internal control and
compliance
management of banks
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risk
Inability of some banks to
comply with BASEL III
requirements
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Regulatory
Lack of independence of
the Central Bank
Dual regulation by the
Financial Institutions
Division and the Central
Bank
Flexibilities given to
defaulters by the Central
Bank
Bank licenses given
arbitrarily
capitalists
to crony
Recapitalisation of banks
by the government
Quasi-monopolistic power
of few bank oligarchs
CPD (2023): State of the Bangladesh Economy in FY2023-24 (First Reading)
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Legal
Amendments of Banking
Company Act to favour
vested interests
Weaknesses in Financial
Loan Court Act
Loopholes in Bankruptcy
Act
Delays in judicial process
and long backlog of cases
Insufficient number of
judges dealing with loan
cases
⚫ Lenient
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Data and information-
related
Limited access to timely
data
Apprehensions regarding
quality of data
Absence of disaggregated
data
• Low reflection of data use
in decision-making and
policy measures
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legal stance
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against willful defaulters
Lack of transparency
about use of data in
decision-making process
False information, forged
documents and
fake
companies used for
obtaining loans
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