The government may tread on the central bank’s path if its large loan restructuring policy fails to improve the default loan situation.

“Let us see what the Bangladesh Bank has done [about the restructuring policy]. If it does not work, we will intervene,” Finance Minister AMA Muhith told reporters yesterday at his secretariat office.

The central bank last week formulated a restructuring policy for large loans with relaxed conditions to relieve the handful of large borrowers from their overwhelming immediate debt burden.

Asked what he thought of this bailout attempt by the central bank, Muhith said: “I don’t have any quarrel with this. If I had one, you’d have known by now. It is alright.”

One of the biggest beneficiaries of the policy would be the Beximco Group, and experts are of the opinion that habitual defaulters should not be offered this facility.

Asked if the central bank should bar the Beximco Group from taking the restructuring facility, he said: “I will refrain from commenting on it.”

He went to cite the case in 1983, when the government had to take several steps to bail out four large defaulters then.

If it was not done, there would have been a severe crisis of production and employment, as they were the largest employers and the defaulters as well.

Ten years later, there was another spurt of large defaults, he said, adding that the default culture started after the liberation and the rigid government policies were partly to blame.

“And now we are finding it difficult to get out of this culture — it is a very, very difficult exercise.”

But the situation has improved since then: default loans now account for 8-11 percent of the total loans, in contrast to 50 percent in the 1980s, he said.