A special audit will be conducted into every bank to find out who took loans and where the imported capital machineries were set up, said Finance Minister AHM Mustafa Kamal yesterday.
The proclamation can be viewed as Kamal being as good as his word to bring down default loans in the banking sector when he took office last month.
“We want to come to a situation that everyone will know the truth,” he said at Rupali Bank's annual conference, which was held at the capital's Krishibid Institution Bangladesh.
The initiative though will be taken after discussions with the Bangladesh Bank governor and secretary to the financial institutions division.
Defaulting on a loan is a crime for anyone as it is public money, he said, while warning of strict actions against wilful defaulters.
There are two types of borrowers: one who takes loans with the intent of never paying back and the other who fails to pay back due to circumstances beyond his/her control.
“We want to know who the genuine businessmen are and who the dishonest ones are.”
Kamal went on to cite the case of Malaysia, where a list of defaulters is circulated to all agencies. Defaulters are barred from leaving the country.
Malaysia successfully brought discipline to its financial sector due to the strict rules and regulations.
“Bangladesh should follow Malaysia's practice. Good borrowers should be encouraged and bad borrowers should be punished. Dishonest businesspeople will not be spared.”
Punitive actions will also be taken against the bankers helping the dishonest businesses, he said.
But if any businessperson fails to pay back loans due to genuine reasons, he will be treated with kid gloves.
“It seems that some people take loan in the name of export but the export proceeds do not come into the country. The same people are doing the same thing over and over again but banks are not looking at it. Strict action will have to be taken in such cases,” he added.
BB Governor Fazle Kabir appreciated that the bank brought all the branches under automation but he is disappointed about its high default loans.
Rupali's default loans at the end of September last year were upwards of 22 percent, he said.
“Its profits also declined,” he said, adding that the bank should put more emphasis on strengthening corporate governance.
Fazlul Haque, additional secretary to the financial institutions division, and Monzur Hossain, chairman of Rupali, were also present.