Bangladesh Bank Targets Reduction of Non-Performing Loans
In an effort to boost the banking sector’s health and promote sustainable credit growth, Bangladesh Bank has instructed all commercial banks to implement effective strategies to lower non-performing loans by December 2025.
This directive came from a meeting held yesterday between Deputy Governor Kabir Ahmad and the managing directors of various banks at the central bank’s headquarters.
NRBC Bank’s Managing Director and CEO, Mond Tuhidul Alam Khan, confirmed this news, stating, “Bangladesh Bank has mandated all banks to strictly follow the central bank’s regulations and collaboratively work towards significantly reducing non-performing loans by the deadline.”
Tuhidul added that a recent comprehensive circular from the central bank encourages banks to take a more proactive stance on managing non-performing loans. This allows them to negotiate, reschedule, or restructure these loans while adhering to regulatory guidelines.
He remarked, “This initiative should help struggling borrowers while ensuring stable banking operations and upholding financial discipline throughout the sector.”
Another bank managing director who attended the meeting expressed that the central bank was concerned about the rise in non-performing loans up to September. Bangladesh Bank officials inquired about the effectiveness of previously provided policy support in addressing the defaulted loans issue.
This managing director noted, “Many banks have indicated they are taking steps to deal with non-performing loans already.”
Furthermore, Bangladesh Bank has highlighted the importance of robust recovery strategies alongside other actions like writing off uncollectible loans and rescheduling feasible ones to alleviate the overall burden of non-performing loans.
Meanwhile, a different bank manager remarked, “Following Bangladesh Bank’s newly introduced loan write-off policy, we’ve issued a one-month notice to our customers. This was also communicated to Bangladesh Bank during the meeting.”
