Impose travel restriction, publish identity of loan defaulters: ABB

The Association of Bankers, Bangladesh (ABB) has proposed a series of legal, regulatory, and institutional reforms to curb the country’s mounting default loans and speed up the recovery of classified assets.

The association submitted the proposals to the Bangladesh Bank governor through a letter following a discussion it held with the banking regulator earlier on November 12.

In its recommendations, the bankers’ body called for stricter action against wilful defaulters, including travel restrictions, public disclosure of their identities, and disqualification from contesting elections of business associations.

At the same time, it suggested providing limited and time-bound relief for borrowers facing genuine distress due to illness, death, or natural disasters, aligning such measures with international best practices.

To accelerate loan recovery, the association proposed tax and duty exemptions on bank-auctioned assets, income tax incentives for buyers, and the removal of court approval requirements for transferring auctioned properties.

It also sought greater cooperation from land registry offices to ensure the swift transfer of mortgaged assets.

The bankers further recommended simplifying proceedings under the Money Loan Court Law by limiting court adjournments, expediting enforcement of arrest warrants, restricting long-term installment facilities, and establishing separate loan recovery courts in districts with high default cases.

To prevent new defaults, ABB proposed creating a central database of mortgaged land and valuation information under Bangladesh Bank, enabling banks to verify collateral more efficiently.

Signed by ABB Chairman and City Bank Managing Director Masrur Arefin, the letter expressed optimism that the central bank would act swiftly to implement the proposals and restore discipline and confidence in the banking sector.