Default culture and governance do not go together

One does not need much wisdom to understand the parlous state of the country’s banking system. The degree of defaulted loans, or loans which have not been paid back by borrowers to the banks, stands at a whopping Tk50,942 crore.

Half of this amount lies with 300 borrowers and we have been informed that there are no fewer than 1.7 lakh loan defaulters in the country. 

These borrowers have effectively kept the 160 million people of Bangladesh hostage to their predatory behaviour.

And that is not all. Altogether there are 14,617 individuals each of whom has outstanding loans of Tk5cr against himself or herself.

Last year, the list of loan defaulters released by the authorities spoke of 100 defaulters. No action was taken and no justice was served. They have all gone scot-free. This year the list has expanded, to no one’s surprise.

The culture of impunity thrives

That the finance minister has been speaking in the Jatiya Sangsad about loan defaulters is a clear sign f the state of things. It does not allay our fears about the direction in which the national economy is headed.

With as many as 300 bank loan defaulters on the loose and with hardly any visible sign of the law being applied to compel them to repay the loans, it is obvious that we are in trouble as a society.

Nowhere around the globe does a powerful and influential band of loan defaulters exist to undermine, indeed intimidate, the state into silence and pusillanimity in its sinister ways.

The finance minister, in his statement in the Jatiya Sangsad on the subject the other day, carefully chose to stay away from revealing the names of the big defaulters. That was an unpleasant surprise, almost an outrage, seeing that it raises a good deal of concern among citizens on whether the state can at all recover the money taken by these defaulters.

Since the minister happens to be a public representative and speaks for the government, it should have been his moral responsibility to name names, the objective being for the law to deal with the unscrupulous individuals who have consistently and persistently played havoc with national resources.

The concern that we have is shared by such international agencies as the IMF, which naturally is apprehensive of the risks the banking sector has been put into through the government’s failure to take the defaulters to the task.

These worries assume darker dimensions when one notes the baleful presence of a nexus at work in the central bank and other banks, the clear aim being to help these defaulters stay beyond the purview of the law.

We recall those earlier budget moments -- with less than happiness or pride -- when the finance minister’s predecessor was vocal in his determination not to permit any black money to graduate into white money.

But when the moment of decision came, black money did indeed become legitimate, to a point where individuals with questionable sources of income were emboldened into thinking that they could get away with anything and they did get away with everything.

Highway robbery was acknowledged as the new truth. A silver lining in the clouds, albeit all too brief in appearance, appeared when the new finance minister vowed to give no room to any more people to default on repayment of loans. 

But that promise is now faltering and there is precious little sign of serious and purposeful efforts being expended in taking the loan defaulters to task under the law of the land. 

For their part, the defaulters have rushed to the judiciary and come back with stay orders against any move to have them prosecuted.

The loopholes in the law have been an embarrassment for the state and that is clearly a pointer to the need for the loopholes to be plugged or for special laws to be enacted to deal with these loan defaulters on a fast-track course to justice.

The rule of law must prevail

It is not enough to mouth the old platitudes of the law taking its own course. If the law is weak, change the law, and give it a tougher skin.

In a land where poor peasants are hounded on a regular basis over their failure to pay back the relatively meagre loans they have taken from the banks, it is a scandal having those who have taken out millions, who have never been afraid of not paying them back, strutting around in the false feathers of so-called industrialists. 

The law must be seen to be in action against these elements who have happily borrowed from the banks and have been inventing all sorts of excuses to avoid paying back the money they have borrowed.

Let us not pretend that our banks will go on doing business as usual despite such criminality. Unless drastic and effective measures are taken to haul these loan defaulters in, citizens will remain in a state of grave worry.

The economic fate of the nation must not lie in the hands of those who swindle the state out of resources. 

It ought not to be in the hands of those who are unwilling or unable to take action against them.

Governance requires that these elements who have defaulted on a repayment of loans be dealt with harshly, without pity. The state will do the nation much good by seizing the assets of these agents of darkness.

Pampering them has proved suicidal. Jailing them for their grave offenses will be a mark of the state reasserting itself. 

This country is not post-Gorbachev Russia. It must stamp out any move for an oligarchy of the corrupt and unethical and anti-national to sprout across the political landscape.

This culture of bank loan repayment default will be an Achilles’ heel for the government, indeed for the nation, as long as platitudes are mouthed and clichés are proffered in place of firm, focused, and effective policy. 

A culture of impunity militates against the lofty principles of democratic governance. 

Syed Badrul Ahsan is a journalist and biographer.