- Nearly 13m displaced people at health risk for funding cuts |
- Sustained support must to prevent disaster for Rohingya refugees |
- UN rights chief condemns extrajudicial killings in Khartoum |
- BNP stance on reforms: Vested quarter spreads misinfo; Fakhrul |
- New Secy-Gen Shirley Botchwey pledges to advance Co’wealth values in divided world |
Bad loans are breaking our financial sector
What is first needed is the will and the desire to truly change
The recent surge in defaulted loans among non-bank financial institutions (NBFIs) in Bangladesh is yet another troubling sign of the grave challenges that our financial sector continues to face. Indeed, it is truly shocking to learn that, as per central bank data, there has been a rise in bad loans of more than 37% in just three months of 2024 in NBFIs.
It is disheartening how this trend only reflects not just NBFIs but rather encompasses all financial institutions (FIs) in the country, painfully highlighting the urgent need for comprehensive reforms to address the root causes of this crisis that continues to grow with each passing year.
Indeed, as we continue to talk of the broader systemic issues that plague the financial sector, we must ask: When will we truly see concrete actions that allow our financial sector to find some stability?
The rise in defaulted loans is of course symptomatic of the culture of impunity that has permeated Bangladesh's financial sector for too long. This culture, characterized by lax enforcement of regulations, favouring powerful individuals and parties, and overall weak oversight, has emboldened borrowers to default on their loans without fear of consequences.
To bring defaulted loans down and ensure greater stability in the financial sector, what is first needed is the will and the desire to truly change. It is only by addressing and eliminating our culture of impunity and improving transparency and accountability will we ever get close to a stable and sustainable financial sector that serves the needs of its people.