The Client – Lender Tussle

BNB client default cases total Nu 3 billion as of June 2017

l  Usha Drukpa, Thimphu

 

One of the maximum cases that reach the courts is defaulters of loans. While clients say that due to the banks seizing all property, movable and immovable and making them incapable to repay, Bhutan National Bank’s (BNB), Chief Executive Officer (CEO) Kipchu Tshering, has a different story.

The CEO said the major defaulters are business enterprises, overdraft, contractors and manufacturing factories.  He also said the biggest challenge was bad debtors and that some have absconded. “It is impossible to trace them,” he said.

“If the people are careful while getting loans, then there would be no loan defaulters,” he said, adding that people even lie while availing loans.

However, he said BNB give clients who do not pay enough time. “Apart from the due date, we extend time as far as possible but if there is no way then the bank is forced to seize their property,” he said. He also said that the loan defaulters are usually high in the beginning but it subsides at the end of the year.

A BNB official also said that other than defaulters absconding; there are cases, where people have no proper address, which tracing them almost impossible. “In such cases, the institute seeks help from the court and police,” he said.

Further, he added that seizing movable properties such as vehicles are difficult. “We find that most have been sold and seizing such properties from the third party is very difficult,” he said, adding that the number of default cases has never reduced.

However, a contractor contradicted what BNB officials said, adding that Banks “are always out to seize properties.” “In most cases, Banks seize our machines like excavators, road roller, bituminous paver, batching plant and other major equipment, without which we cannot do any work. And when we cannot work, how can we repay the loans,” he said. He also mentioned that loans help them and that he is grateful to the financial institutes. “But the banks should know that we are also working for them, by paying monthly interests,” he said.

Meanwhile, in 2016, the total sum of default cases of BNB was around Nu 1.7 Billion. As of June 2017, Nu three billion was the sum that clients owed to BNB. Of this, three percent was under auctions and litigations.

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