Banking laws may be amended to create exit for genuine loan defaulters: Salman F Rahman
The PPP projects have been delayed for years as the proponents lack financial and technical capabilities for implementation, he said
The government is thinking to amend the banking laws to create an exit way for genuine loan defaulters, not the willful ones, said Salman F Rahman, adviser to the prime minister on private industry and investment.
"The defaulted loans are a big problem in the country and many countries of the world including India and China are facing the same issue, he said while addressing a seminar titled "The Role of PPP in Achieving Vision 2041" organised by the FBCCI in its auditorium in the capital on Saturday.
"Discussions are underway in this regard. Banking laws will be amended to get entrepreneurs out of loan default trouble. Besides, the tax-to-GDP ratio has to be increased," the adviser said.
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Salman F Rahman said the implementation of projects approved under the public-private partnership (PPP) arrangement has been delayed for years because the individuals/organisations who proposed the project do not have the capacity to finance these projects.
"After getting the approval, the proponents seek financing from banks or other sources. From now on, if anyone proposes a project under PPP, they will have to show evidence of their own financing and technical capabilities to implement the project," he said, adding that the PPP law is very good but there are some structural problems in implementing this law.
"Those who are coming from the private sector should have more equity. You do not need to have 100% equity; you will go for other financing but your equity is more important here. If you constitute a project through bank financing, definitely the project will fail," he said.
"I have taken an initiative in this regard. I will sit with the PPP authority to fast-track projects. If the project proponents can provide evidence that they have secured financing, then by looking at their equity and debt, we will be able to tell whether the project will be a fast-track one or not," Salman F Rahman said, adding that there have been precedents of PPP proposals delayed for seven years.
"There are many opportunities for PPP projects. More emphasis should be placed on these projects now considering the economic challenges we are facing including our foreign exchange reserves," the prime minister's adviser said.
"Technology is another problem. While making the project proposals, companies claim to have the best technology but their technology is not available during project implementation. Thus, they have to show more definitive proof in this regard," he said.
State Minister for Planning Dr Shamsul Alam and the Chief Executive Officer of Public Private Partnership (PPP) Authority Mohammad Ibrahim were present as special guests at the seminar presided over by FBCCI President Jashim Uddin.
