With non-performing loans (NPLs) currently standing at an unbelievable Tk644,515 crore, making up almost 36% of all loans, to say that the time for complacency is over is, at this point, comical.
The latest Bangladesh Bank report reveals a staggering escalation: In just one year, defaults have more than doubled from Tk285,000 crore to Tk644,515 crore, an increase of about Tk360,000.
This is beyond catastrophic.
Now, while it is unquestionable that it is the 16 years of misrule and impunity that was perpetuated by the previous regime that has led to such escalation, what is also true is that certain businesses and individuals continue to get away with what can only be described as robbing our banks and financial institutions.
Experts rightfully point to years of weak supervision, political interference, and reckless rescheduling practices as the root causes, but we expect things to turn for the better, not the worse. At this stage, the very foundation of financial stability is all but missing from our nation and has undermined depositor confidence.
It is the shocking collapse of accountability that is arguably even more alarming, and has been a major factor as to why defaulters continue to be emboldened. As always, while these nefarious entities enjoy the millions and billions they have taken from our banks, it is honest borrowers and depositors who are left to bear the cost.
This normalization of bad loans cannot continue. Unless strict measures – chief of which is ending the impunity and lack of accountability for defaulters along with stronger regulatory oversight – are enacted immediately, there appears to be no hope for our financial sector.
This continued escalation of non-performing loans is akin to a bad dream that is eating away at any semblance of credibility our economy has. We must act – decisively, transparently, and urgently.
