Bangladesh's big corporate institutions want to establish themselves as billion-dollar companies by investing one after another. While investing, they rely most on banks. Many corporates are also investing in businesses other than the ones they are experienced in. In doing this, corporates are also putting themselves in danger, putting the banking sector in danger. And this has an impact on me or you.
In today's Star Explanation, I will discuss how excessive dependence on bank loans is putting corporates in danger and how you are also at risk due to their danger. A big risk has been created in the financial sector of Bangladesh. I am explaining how. The number of good corporate institutions in our country is not many, but the number of banks is very high. As a result, banks want to give loans to these corporates. And since corporates can easily get loans from banks for investment, they are investing in loans whether they need them or not.
They are also investing in places where they do not have experience. However, many people are not able to make a profit due to various business problems in the country, fuel shortage, high interest rates. The biggest crisis arises when they start losing a lot of money after investing even when they have no experience. Meanwhile, by taking loans from banks, they are either defaulting on their loans or having to sell their assets to repay the loans. Several such incidents have occurred recently. Meanwhile, banks usually take deposits from you for a few months or a few years.
They are giving loans to corporates for a very long time. As a result, banks are struggling to pay depositors. Apart from the looting that has taken place in the banking sector, this is creating a big danger for banks. Now the question may arise, how are you or I being harmed by corporates getting trapped in the bank loan trap? First of all, think if you work in a corporate organization and that organization is carrying the burden of additional bank loans, will you get a good salary? Or will your salary increase too much at the end of the year?
Rather, if the organization is in danger, you may even lose your job. This is happening in many organizations. And if you are a small entrepreneur, you will see that when you go to the bank, the bank does not want to give you a loan. Because instead of you, it wants to give loans to big organizations or corporates. As a result, those who need loans do not get loans. On the contrary, those who do not need money, by taking more loans, they themselves are also getting into crisis, creating a crisis for others.
And if you are an investor in the stock market, it can be said that there are no good company shares in the market for you. Because good corporates are getting loans easily from banks. So why would they go to the stock market? As a result, this tendency of big organizations to give loans easily from banks is putting corporate organizations in danger on the one hand, and on the other hand, the bank itself is also putting itself at risk. It is creating problems for the stock market as well.
Finally, let me give you some information. Last year, corporate organizations took 99 percent of their long-term financing or long-term loans from banks and only one percent from the capital market. However, if they raise capital from the capital market, they have to pay slightly less tax, and the biggest advantage is that if the company cannot make a profit in a year due to some business reason, it does not have to pay any interest. Moreover, it does not have to return the money it has raised from the capital market.