Willful defaulters will lose all civil benefits

Willful defaulters will lose all civil benefits

The Bangladesh government has taken a firm stance against willful defaulters, as outlined in a circular issued by Bangladesh Bank on March 13th. The circular emphasizes stringent measures to be implemented against individuals identified as willful defaulters, effective from July 1st. This report delves into the details of the circular, the consequences for willful defaulters, and the challenges associated with determining willful defaulters.

Details of the Circular

The circular sent from Bangladesh Bank to the chief executives of all commercial banks delineates clear instructions regarding the identification and consequences for willful defaulters. Beginning July 1st, defaulters will be identified based on loan default data up to June 30th of the current year. Willful defaulters will face severe penalties, including loss of civic privileges.

Consequences for Willful Defaulters

Travel Restrictions: Willful defaulters will be prohibited from traveling abroad and will lose their right to travel by air.

Property Restrictions: They will be unable to buy or sell houses, land, or flats in their own name, effectively limiting their ability to deal in real estate.

Asset Restrictions: Willful defaulters cannot sell their cars, company shares, or other immovable assets. They will also be disqualified from holding directorial positions in banks and financial institutions.

Business Restrictions: Willful defaulters will be barred from withdrawing capital from the stock market and establishing new businesses. Additional measures against them are also being considered.

Challenges in Determining Willful Defaulters

Despite the stringent measures outlined in the circular, questions have been raised regarding the criteria for identifying willful defaulters. Concerns have been voiced about the potential for political influence in determining default status and the lack of judicial analysis in the process. There are apprehensions that individuals facing business crises or complicated circumstances may be unfairly labeled as willful defaulters.

The initiative to crack down on willful defaulters represents a significant step towards promoting financial discipline and accountability. However, it is imperative that the process of identifying willful defaulters remains neutral and transparent. Banks must ensure that only those genuinely guilty of willful default are included in the list, avoiding any political influence or bias. Failure to do so may undermine the effectiveness of the initiative and erode public trust in the financial system.