The Opposition Party is recommending the government to immediately lift the suspension on rural loans from the Bhutan Development Bank. According to the party, the suspension has affected the rural communities and small businesses across the country as BDBL caters primarily to the credit need of rural people. Following a directive from the Royal Monetary Authority in May this year, Bhutan Development Bank temporarily suspended disbursing loans due to high non-performing loans.
The Opposition Leader said the need to immediately lift the suspension on the BDBL loan was one of the main issues people raised at public meetings during his recent tour to eastern and southern districts.
“They must lift the suspension and make loans available to the people. Otherwise, it is going to affect the livelihood of the people. It is also going to put people more into poverty if people cannot make a living from farming,” said Dorji Wangdi, the Opposition Leader.
Our request to the government is to lift the suspension and ensure that BDBL resume giving loans to the rural communities.”
He added the government, during the last parliament session, said the suspension is temporary and access to loans would resume in two to three months. However, they remain frozen.
Meanwhile, during the Meet the Press session today, the Prime Minister said the government has already sent two letters to the Royal Monetary Authority on the matter. But RMA didn’t agree to lift the suspension.
“We wrote back to the Central Bank saying that it is not professional. There are loans in the process of being disbursed, projects being approved, and some loans being released in a phased manner. Phase I is released, project implementation is started and Phase II and III were stopped,” said the Prime Minister.
“We argued that the RMA provide loans to sectors which will not result in NPL. Not all the loans given by banks goes to NPL, some sectors are profitable and some loan sector has not gone into NPL. Some loan portfolios are risky and going more into NPL and we said we cannot say anything even if RMA stopped such loans. RMA didn’t agree with this,” continued the Prime Minister.
He added that the authority rests solely with the Royal Monetary Authority.
As per the RMA’s Annual Report last year, on the share of total NPL by banks and non-banks, the banks accounted for 61.8 per cent, with the highest in the case of BDBL at more than 21 per cent.
Pema Seldon Tshering/Karma Samten Wangda
Edited by Tshering Zam
