Bangladesh Bank Governor Dr. Ahsan H. Mansur on Monday announced a strategic plan to reduce large-scale corporate lending by banks as part of a broader effort to contain defaulted loans and develop the country's bond market.

Speaking at a seminar titled ‘Bond Market Development in Bangladesh: Challenges and Recommendations’ at the Renaissance Dhaka Gulshan Hotel, the Governor emphasized that corporate entities will be encouraged to decouple from traditional bank financing for large projects.

Governor Mansur reaffirmed that the central bank will strictly enforce the ‘Single Borrower Exposure Limit’, which restricts a bank from lending more than 25 percent of its total capital to a single client.

Funded Loans will be capped at 15 percent of capital. Non-Funded Loans will be capped at 10 percent of capital.

Limits will remain flexible for green financing, including the power and energy sectors.

The Governor described this restriction as a "push factor" designed to drive corporate houses toward the bond market for their long-term financing needs.

Speaking in the seminar, Bangladesh Securities and Exchange Commission (BSEC) Chairman Khondoker Rashed Maqsood noted that easy access to bank loans has historically discouraged corporates from entering the capital market.

He identified long-term bank lending as a primary driver of the rising volume of non-performing loans (NPLs) in the country.

"The economy will be shifted from bank-dependency to capital market-dependency," Governor Mansur stated, adding that while the central bank is currently leading the initiative, full regulatory control of the bond market will eventually transition to the capital market authorities.

To make bond issuance more attractive, the central bank and BSEC are working to reduce the time and cost required to issue bonds, provide attractive incentives for investors and conduct ongoing research to align the market with international standards.

The seminar, moderated by Deputy Governor Habibur Rahman, featured high-level panel discussions. Notable participants included Finance Secretary Khairuzzaman Mozumder, ICC Bangladesh President Mahbubur Rahman, DSE Chairman Mominul Islam, and senior executives from Pran-RFL Group and City Bank.

The discussions were based on joint research conducted by Bangladesh Bank and BSEC, presented by central bank official Ezazul Islam, which highlighted the roadmap for a sustainable secondary bond market in Bangladesh.