Govt backtracks on high-powered body

The government has backtracked on appointing a high-powered committee on the country’s ailing banking sector as it will constitute a review committee to deal with the growing bad loans in the state-owned banking sector.
The decision was made by finance minister AHM Mustafa Kamal on Monday after financial institutions division secretary Asadul Islam submitted a proposal for appointing the high-powered committee at the Economic Relations Division.
Mustafa Kamal, who directed the FID officials on January 9 to appoint the committee for amending Bank Company Act, 1991 to bolster the bad loan recovery process, changed his mind and finally asked to appoint a review committee to be led by a Bangladesh Bank deputy governor. 
While talking on the much-talked about high-powered committee, FID secretary Asadul Islam on Wednesday told New Age, ‘nothing was backtracked.’
Everything was on the table and everything was going on, he added.
The finance ministry officials said that BB deputy governor Ahmed Jamal was expected to lead the proposed review committee.
Two representatives from the FID and the state-owned banks were expected to assist the deputy governor in the review process of the bad and written-off loans and the ways for checking those.
BB was expected to notify the review committee soon, said the finance ministry officials.
Former Bangladesh Bank deputy governor Ibrahim Khaled has already opposed appointing a relatively a smaller committee.
He noted that former central bank governor Farashuddin Ahmed should be appointed chief of the committee for meaningful changes to the dangerous looking trend of bad loan.
The present government has been facing serious criticism for its failure to check the high growth of bad loans that stood at Tk 99,370 crore until September 2018.
The amount is 11.48 per cent of Tk 8,65,930 crore outstanding loans in the country’s banking 
system and much higher than bad loans of 2 per cent in Nepal and 7 per cent in India.
The defaulted loans in six state-owned commercial banks — Sonali, Agrani, Janata, Rupali, BASIC and Bangladesh Development — stood at Tk 48,080 crore or about 48 per cent of the bad loans.
In July, Federation of Bangladesh Chambers of Commerce and Industry demanded a highly skilled task force to address the problem of non-performing loans in the banking sector while local think-tank Centre for Policy Dialogue has long been demanding appointing a commission on the banking sector.
In December, CPD released an estimation that Tk 22,000 was plundered from the banking sector in last one decade through scams in recent years.

News Courtesy: www.newagebd.net