After the fall of the Sheikh Hasina-led government brought to light the long-concealed scale of non-performing loans (NPLs), the central bank advised managing directors of commercial banks to adopt restructuring measures and apply partial loan write-offs. At the bankers’ meeting, Bangladesh Bank Governor Ahsan H Mansur reported that NPLs rose to Tk 6.44 trillion by September — over 35% of total loans.

In June, the amount stood at Tk 2.11 trillion, while in December last year it had reached Tk 3.45 trillion. Once political transition took place, the real risks embedded in bank portfolios became apparent.

On 4 December, the central bank approved a partial write-off policy for impaired and loss-category loans with minimal recovery prospects. Executive Director Sirajul Islam told TBS that MDs were asked to strictly implement policy circulars to support distressed borrowers. He added that the governor placed special emphasis on writing off loans under the loss category.

A private bank chief said the governor wanted rescheduling to be more accessible for borrowers willing to return to regular repayments. Agricultural credit disparity was highlighted, as the sector contributes 14–15% to GDP but receives only 2% of loans. The governor urged banks to raise this to at least 10%.

To boost CMSME financing, the governor proposed setting a 20% annual growth target and announced that the provisioning rate would be reduced from 1% to 0.5%. He also asked deputy governors to expedite previous proposals to raise personal and credit card loan limits.

Despite approval of long-term restructuring plans, NPLs continue to rise. Bankers argue that a two-year grace period and minimal down payment expose depositors’ funds to risk and impede recovery. Influential borrowers often avoid negotiations even after gaining approval. Businesses contend that banks themselves obstruct implementation and that without fixing policy flaws, long-term restructuring will fail to reduce default risk.