Banks need to launch post-loan syndication system for realizing loan
The private sector National Bank has been carrying over Tk 2,000 crore default loan which is about 7 percent of the total loan disbursed by the bank. A post-loan syndication system should be launched for realizing the loan, said National Bank deputy managing director A S M Bulbul in an exclusive interview with the daily Observer.
Observer: What are you thinking about realizing defaulted loan?
Bulbul: Obviously, National Bank as well as other banks is thinking about realizing default loan. We have no strategic difference. However, our bank considers the legal step as the last resort to that end, and prefers using the social bond and communication at first. Defaulted loans are increasing in the sector, may be due to failure of the banks, but we are resolved about reducing the amount.
Observer: Have the banks taken any coordinated steps to realize the defaulted loan?
Bulbul: No, the banks have no any coordinated initiative to realize the defaulted loan. I have talked about the matter at a seminar recently. There are some debtors who take loan from more than one bank. It is necessary to launch post-loan syndication system for realizing their loan. There is no alternative to coordinated effort in such adverse situation.
Observer: How many loan defaulters are in National Bank presently?
Bulbul: The default loan is about Tk 2000 crore which is less than 7% of the total loan of Tk 26000 crore disbursed by National Bank. However, we are trying to downsizing the rate to 5%.
Observer: Will the depositors be affected due to single digit interest rate?
Bulbul: Actually, not only the corporate organizations but all will benefit with the implementation of the single digit interest rate. There has been no classification of loan receivers in availing 9 percent interest facility. It is a policy decision of the government. The government wants to make people beneficiary of the policy and develop accountability among the stakeholders.
Apparently it seems the depositors will be affected due to slashing interest rate to a single digit, but at the end of the day, they won't be affected if the rate is implemented by all banks. Because, we know that interest rate is a regulator of inflation. If one gets 12% interest against his deposit, he will get more return from his investment, and also have a good purchase power. It’s a simple math of economics. But when the rate is reduced by 3-4%, the investor’s mindset also will be reshaped. He will ‘cut his coat according to his cloth’, and manage his expenses with the 6% profit. Apparently the depositors seem loosing. Actually he may not get much benefit with the 6% rate, but will not be a looser either.
Ques: The government recently has announced to collect Tk 26 thousand crore from banks. Would it create any obstacle to bank business?
Bulbul: Look, there are 54 banks under Bangladesh Bank. So, Tk 26 thousand is not that huge in respective of the total economy. Government will not take the money from the banks directly, but through the banking system, and there is Bangladesh Bank and state-owned banks. I think it will not create any obstacle to bank business.