Defaulters should be subjected to social pressure

It is important to implement the laws that are being amended. I heard the issue of banning wilful defaulters from travelling abroad has come up in the amendment. Along with this, these defaulters should be subjected to social pressure, including deprivation of various facilities.

In many countries, including China, the children of such defaulters cannot enrol in elite schools. We have to go that way. A ban on foreign travel alone does not seem sufficient although we have not seen much enforcement of these policies.

At the end of the day, our target is to collect the money. What is in the new amendment to do that? – we do not know. If a case is filed in the Artha Rin Adalat to recover money, it goes on for years. This is due to various loopholes in the law. It remains to be seen what the new amendments have in place to reduce that. I think steps should be taken to fix a maximum period from initiation of litigation to settlement.

Although the number of directors appointed from a single family has been reduced, their appointment period has not been reduced. I think the issue of family influence has not been resolved much as the term of directors appointed from a family is nine years while the term for other independent directors is six years. It may not be realistic to expect that the new amendments will change the decision-making process of a bank's board too much.

We also need to keep in mind the definition of financial capability. Individuals, organisations, public limited companies and private limited companies have different definitions and proprietorships. These should also be taken into consideration.

Dr Zahid Hussain is the former lead economist, World Bank's Dhaka office
 

TBS Staff Reporter Tonmoy Modak spoke to Zahid Hussain over the phone