Banking laws could be changed to create an outflow for genuine defaulting debtors: Salman F Rahman
The government is considering changing banking laws to create a way out for genuine defaulters, not willing defaulters, said Salman F Rahman, adviser to the prime minister for private industry and investment.
“Overdue loans are a big problem in the country and many countries around the world, including India and China, are facing the same problem,” he said at a seminar titled “The Role of PPP in achieving Vision 2041” organized by the FBCCI in its auditorium in the capital on Saturday.
“Discussions are ongoing in this regard. Banking laws will be changed to get entrepreneurs out of default problems. Also, the tax-to-GDP ratio needs to be increased,” the adviser said.
Salman F Rahman said that the implementation of projects approved under the Public-Private Partnership (PPP) has been delayed for years because the individuals/organizations who proposed the project do not have the capacity to finance these projects.
“After getting approval, developers seek financing from banks or other sources. Now, if someone proposes a PPP project, they will have to prove their own financial and technical capabilities to implement the project” , did he declare. adding that the law on PPPs is very good but that there are some structural problems in the implementation of this law.
“Those who come from the private sector should have more equity. You don’t need to have 100% equity, you will go to other funding but your equity is more important here. If you are building a project through bank financing, certainly the project will fail,” he said.
“I have taken an initiative in this regard. I will sit down with the PPP authority to fast-track projects. If the project developers can provide evidence that they have secured funding, then by reviewing their equity and their debt, we can say whether the project will be accelerated or not,” said Salman F Rahman, adding that there had been precedents of PPP proposals being delayed for seven years.
“There are many opportunities for PPP projects. There needs to be more emphasis on these projects given the economic challenges we face, including our foreign exchange reserves,” the Prime Minister’s adviser said.
“Technology is another issue. When formulating project proposals, companies claim to have the best technology, but their technology is not available when implementing the project. Thus, they have to show evidence more definitive in this regard,” he said.
The Minister of State for Planning, Dr. Shamsul Alam, and the Director General of the Public-Private Partnerships (PPP) Authority, Mohammad Ibrahim, were present as special guests at the seminar chaired by the President of the FBCCI, Jashim Uddin.