In a bid to combat the escalating problem of non-performing loans (NPLs) in Bangladesh’s banking sector, the Association of Bankers, Bangladesh (ABB), representing the country’s top banking executives, has submitted a comprehensive set of proposals to Bangladesh Bank. The proposals, officially sent via letter, call for stricter controls over defaulters, including restrictions on international travel without court approval and authorisation for banks to publish their names and photographs. In addition, ABB suggests that defaulters should be barred from participating in any business association elections.
The detailed submission was made following a meeting on 12 November last year with Bangladesh Bank Governor Ahsan H. Mansur. The letter bears the signature of ABB Chairman and City Bank Managing Director, Masrur Arefin. The recommendations primarily focus on reducing NPLs and enhancing cash recovery.
Key Proposals to Reduce Non-Performing Loans
| Area | Proposed Measures |
|---|---|
| NPL Reduction | Partial write-off of NPLs according to international standards; immediate cooperation from authorities in liquidating pledged shares; waiver of interest on personal, home, and small business loans in cases of death, natural disaster, or critical illness. |
| Cash Recovery | Ban on international travel for defaulters without court permission; permission for banks to publish defaulters’ names and photographs; disqualification of defaulters from business association elections. |
| Collateral Sales | Exemption from income tax and VAT on auctioned properties; tax incentives and other benefits for auction buyers; removal of the requirement for district administration approval; maximum cooperation from sub-registry offices; facilitation of land revenue assessment and survey; automatic ownership transfer to banks via court. |
| Legal and Court Processes | Easy access to assets and financial information of defaulters and guarantors; specific down payment conditions in court applications; clear rules for CIB reports and stay orders; establishment of separate financial courts in districts with high NPLs; immediate enforcement of arrest orders at police stations; cases not to proceed without personal appearance of defendants. |
| NPL Monitoring & Prevention | Publication of land surveyors and valuers through the central bank; simplified verification of mortgaged assets; creation and verification of a personal asset database. |
Bangladesh NPL Situation (as of September 2025)
| Sector | Total Loans (BDT crore) | Non-Performing Loans (BDT crore) | NPL Ratio (%) |
|---|---|---|---|
| Banking | 18,003,840 | 6,50,000 | 35.73 |
According to banking sources, nearly one-third of all loans disbursed by the country’s banks are currently non-performing. Industry insiders note that during past administrations, there was a tendency to underreport NPLs, but the current figures reflect the true extent of the crisis. Experts warn that unless the proposed measures are implemented effectively, the ratio of non-performing loans could rise further in the coming years.
The ABB’s proposals underscore the urgency of addressing NPLs to ensure the stability of Bangladesh’s banking sector and protect depositors’ interests. They also aim to balance recovery with fairness, by providing relief in genuine hardship cases while deterring deliberate defaults.