ABA meets with ADB on defaulted loans/BG cases
Date: May 3, 2023
To obtain banks defaulted loans/credit exposures pertaining to Asian Development Bank (ADB)’s contractors, ABA arranged a meeting with ADB to discuss on how to settle banks dues on borrowers/clients who have project contracts with ADB.
The meeting was attended by ADB representatives, ABA’s Board of Directors, banks representatives and ABA management.
Mr. Najibullah Amiry ABA’s Executive Director provided brief introduction about ABA, current status of banking sector and significance of ADB support for empowerment of the banking sector. ABA/Member Banks highlighted below suggestions to ADB as follows.
- Banking sector is backbone of the economy, and without banks, no project can be carried out successfully, so banks should be backed.
- Our economy experienced turmoil, where it impacted banking sector as well.
- Banks provided credit exposures to the ADB contractors as well as guarantees under contracts funded by ADB, but still some of the contractors have not settled their dues.
- Banks provided funded (Loans)and non-funded (BGs) exposures to ADB contractors- where some of the projects completed or are in progress and some has not been started yet. If ADB settle any invoices of the contractors- owe to banks, should engage banks.
- ADB, being the funder of projects exposing banks to direct and indirect risks, can also help banks to discharge their off-balance sheet commitments through direct/indirect discussions with/between contractors and beneficiaries.
- We request ADB that in addition to the contractor’s agenda, support ABA/ banking sector in transition of Islamic banking, channelizing aids through banks and other area.
- Finally, ABA and banks requested ADB to support banks by settling their dues on contractors
In conclusion, ADB appreciated ABA contribution to the banking sector and ensured that to support banks, they will raise this issue with their higher authority for internal discussion.