Challenges for Banks during Loan Adjustment: A Case Study in Bangladesh

Md. Ashabur Rahman, Musferat Mazrun Chowdhury, Md. Anamul Haque

Abstract:

This paper discussed the law of loan adjustment procedure and the efficiency of banks while sanctioning loans. Banks provide support to their local communities through credit facilities for all legitimate business in line with competitively determined interest rates. Although, making loans is the main economic function of banks. When the loans become uncollectible due to mismanagement, illegal manipulation of loans, misguided lending policies or an unexpected economic downturn, banks fall in trouble. At the time it needs to file law suit to adjust the loans. In an underdeveloped banking system, bank deposits have a positive and significant impact on bank loans, but the reverse relationship is not significant. However, litigation is the last way to recover bad loans. There are several problems in the banking industry of Bangladesh. Bangladesh Bank is trying to reduce those problems. In this paper, several solutions are sort out to reduce those problems which will more reliable that will be implemented.

Keywords:

Artha Rin Adalat, Execution, Loans, Non-performing loans, Recovery, Suit

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