Bangladesh Bank (BB) Governor Mostaqur Rahman has said that a policy is being formulated to directly verify large corporate loan proposals before they are sanctioned by commercial banks.

The move is intended to check the rising trend of defaulted loans in the country’s banking sector, according to central bank officials.

The Governor shared the plan during an exchange of views with business editors of some television channels in the central bank headquarters. Following the meeting, BB Spokesperson and Executive Director Arif Hossain Khan briefed journalists on the details.

"Large corporate loans are typically approved by commercial banks. However, the central bank is now considering a process where it will also verify these loans before final approval," he said.

“The policy is still at a conceptual level. No final decision has been reached regarding the verification process, specific policies, or whether expert manpower will be recruited for project assessment. We are announcing this early to alert the banks," Arif clarified.

Central bank officials noted that bankers often recognize potential defaults early but are sometimes forced to distribute loans due to external influence or vested interests. This initiative aims to identify and mitigate such risks before the funds are disbursed.

During the meeting, the Governor noted that while foreign exchange reserves are currently in a relatively stable position, inflation remains a concern and employment challenges persist.

He highlighted those ongoing tensions in the Middle East, specifically the conflict involving Iran, have impacted global markets. The blockade of the Strait of Hormuz—a critical maritime trade route—has driven up the prices of oil, gas, and other commodities, creating pressure on Bangladesh’s energy supply.

Current regulations limit a bank's exposure to a single client to 25 percent of its total capital, comprising 15 percent in funded and 10 percent in non-funded loans. While these limits are somewhat relaxed for the power, energy, and green finance sectors, the central bank intends to strictly enforce these boundaries to encourage alternative financing.