As per a new circular issued recently, banks and financial institutions are supposed to report to the central bank even if the defaulted loan is Tk 1 only (US$.01). Until now, the banks and other financial institutions were supposed to send information on default loans of Tk 50,000 (US$ 602) or more and for credit cards Tk 10,000 (US$ 120) unpaid loans to the central bank’s Credit Information Bureau.

In the circular, the Bangladesh Bank said information on all loans needed to be sent to the CIB database to strengthen monitoring of loans in the banking sector.  Banks and financial institutions need to collect information from the CIB database before approving client’s loan or credit limit.  A defaulter was not able to take loans if the amount of bad debt was more than Tk 50,000. But under the new stringent regulation, anyone with Tk 1 bad loan would not be able to take any loan.

Bank customers who had borrowed over Tk 100 million (US$1.2million) each in past 10 years still owe banks Tk 656.02 billion (US$7.75bn) in unpaid loans,  Finance Minister AMA Muhith said in January.  The list of such loan defaulters includes 1,956 individuals and organizations.

Source: BD News