The wilful loan defaulters should be handed down exemplary punishment as they have tainted the image of the business community and affected the banking sector, said the chief of the country's apex trade body yesterday.

“We want exemplary punishment to the wilful loan defaulters,” Shafiul Islam Mohiuddin, president of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI).

He was addressing a group of businesspeople at a discussion on the budget for the next fiscal year at Dhaka Club in the capital.

In the business world, there are two kinds of loan defaulters: first, those who default because of losses incurred for various reasons; and second, those who borrow from the banking system but never repay, Mohiuddin said.

“The FBCCI will stand by the defaulters who became defaulters while running businesses.”

Mohiuddin said the amount of non-performing loans has crossed the Tk 1 lakh crore-mark, which is a bad sign for the banking sector and also for the economy.

“We want transparency in politics and transparency in business. The whole business community can't be portrayed as criminals because of only two to three black sheep,” he said, indicating at wilful defaulters.

The FBCCI chief said in Bangladesh large loan defaulters get the opportunity to have their loans rescheduled several times whereas such opportunities are non-existent for small and medium enterprises.

“We want such opportunities for the SMEs.” The business leader suggested that the government cut the number of steps required for attaining permission to set up a business.

In Bangladesh, people need to go through more than 16 steps to receive approval whereas the number of steps in Singapore is only four, he said.

Mohiuddin suggested that the government widen the tax net, implement the multi-rate VAT system and provide incentives to emerging sectors such as leather and leather goods and pharmaceuticals.

Speaking at the discussion, Sheikh Fazle Fahim, senior vice-president of the FBCCI, disclosed that he plans to contest in the upcoming elections of the federation as a presidential candidate. The election is due in April.

He said if elected, he would help the business community during talks with the government. He promised to lessen harassment which the business community sometimes faced. Fahim promised to set up an FBCCI University to reduce the skills gap facing many sectors and strengthen the activities of district-level chambers.

The FBCCI has a plan to construct a 50-story building on 54 kathas of land in Purbachal, according to Fahim.

Businesspeople, especially those involved with SMEs, urged the federation's leaders to hold discussions with the government on reducing VAT and income, customs and corporate tax.

The businessmen said private commercial banks are not following a government instruction on bringing down the interest rate to single-digit, although it is necessary as the cost of operations has gone up.