Banks have witnessed a sharp rise in loan default recently, which is alarming to the country’s banking sector, says a report.
11 percent of overall bank loans are classified as default and existing ‘Money Loan Court Act-2003’ requires changes, said the report ‘Role of ADR in collecting default loans’.
Barrister Shafayat Ullah presented the report at a roundtable meeting in the city on Saturday (Jul 21).
The alternative dispute resolution (ADR) may be a means to overcome the loan default crisis, recommended Ullah, who is the head of legal at private City Bank.
Speaking at the progarmme, Legislative and Parliamentary Affairs Division Senior Secretary Mohamamd Shahidul Haque said, “Hassle can be lessened if ADR is followed before moving to the court.”
“Bank loan default in Bangladesh stands at 10 percent, which is only 2 percent in the developed countries. It’s acceptable,” said Haque.
Dhaka Chamber of Commerce and Industry President Abul Kasem said that high rate of loan default forces entrepreneurs to take bank money at a high-interest rate.
Bangladesh International Arbitration Centre President Mahabubur Rahman expressed concern over the recent rise of loan default.