Bangladesh Bank has formulated a new "Exit Policy" aimed at expediting the recovery of defaulted loans. This policy allows both defaulters and non-defaulting business customers to settle their industrial loans by paying off the balance, with specific conditions attached. According to the central bank's new notification, applicants must deposit at least 10 percent of the loan amount upfront to qualify for this facility. Banks have been instructed to develop their own policies in line with the central bank's guidelines, incorporating similar conditions. Under the policy, there will be no change in the quality of the loan until it is fully repaid, and customers utilizing the exit facility will not be eligible for new loans during this period.  Read more: 'Publish list of loan defaulters in parliament': AK Azad "If a businessperson takes this facility, they must repay the entire loan within a maximum of three years. These customers will not be identified as willful defaulters," the notification stated. The central bank noted that borrowers' businesses or projects might incur losses due to uncontrollable factors, leading to hindered debt collection activities and insufficient cash flow for loan repayment. Consequently, such loans are classified as defaults but not as willful defaults. The notification also emphasized that genuine adverse financial conditions can reduce the chances of debt recovery. Therefore, there is a need for a uniform policy to facilitate debt recovery or adjustment through the exit mechanism, as banks have been following varied procedures. In this context, the new policy aims to maintain liquidity flow and reduce defaulted loans in the banking sector. Regular loan exit facilities may be granted for recovering adversely classified loans with poor recovery prospects or in cases where projects or businesses have closed due to uncontrollable reasons. Read more: Process on to prepare list of loan defaulters, finance minister tells Parliament To apply for the facility, borrowers must pay a minimum of 10 percent of the existing loan balance in one-time cash. Banks are required to settle these applications within 60 working days of receipt.

The main opposition Jatiya Party lawmaker Anisul Islam Mahmud on Tuesday (February 13, 2024) demanded the government of Bangladesh put an end to the loan default culture to save the country’s economy. “In this situation, we need to stop the culture of wilful loan default,” he said. Anisul Islam, a veteran parliamentarian and the deputy leader of the opposition, placed the demand in the House, taking the floor on a point of order. Citing a newspaper story, he said the banking sector's defaulted loans soared by over 20 percent to Tk 145,633 crore in 2023 as both governance and accountability continue to get looser. 98 percent of the country's demand for medicine is produced locally: Health Minister “Whenever this issue is being discussed, we are told that Bangladesh Bank and other banks are taking measures to reduce this (defaulted loans). But we never see that defaulted loans are declining, rather it is going higher,” he said. The Jatiya Party MP said the amount of defaulted loans was Tk 28,000 crore as of 2008. The number of defaulted loans has increased to Tk 1.45 lac crore since 2008 to as of today which is very alarming. He said there is a cash crisis and a dollar crisis in the banking sector. Some strong measures have been taken to tackle this situation. With Pahela Falgun-Valentine’s Day, the nation eyes a festive February 14 Anisul said Bangladesh Bank (BB) is telling that they want to reduce the amount of defaulted loans from existing nine percent to eight percent of total outstanding loans.   “But their (BB) track record says that they will not do so,” he continued. The opposition lawmaker requested the Finance Minister to give importance to stopping the loan default culture. “The issue of loan default culture has been discussed in parliament so many times. But nothing has happened,” he added. Govt okays project to provide freelancing training to youths in 48 districts

Independent MP AK Azad on Monday (February 12, 2024) demanded a list of those who have laundered money abroad taking loans from banks be placed in Parliament. Azad, who was elected MP for the first time, came up with the demand while participating in the discussion on the thanksgiving motion on the President’s speech. He said that Prime Minister Sheikh Hasina is totally against corruption and Awami League's manifesto also cited that. “First of all, good governance will have to be established in the banking sector,” Azad said. Read more: Bangladesh Bank sets an 11-point roadmap to realise default loans Welcoming Bangladesh Bank's roadmap for reforming the banking sector, Azad, also President of Newspapers Owners Association of Bangladesh (NOAB), said the amount of defaulted loans in Bangladesh is around Tk 1,45,633 crore. “But in reality, the amount is much more. But through write off, the amount of debt is shown less. Those who have taken loans and invested in factories and failed to repay, may be exempted subject to investigation,” he said. He demanded to bring to justice those who did not invest loan money in any business, and instead laundered the money. “They made home at Begum Para, and second homes. Their list should be published in the parliament,” he demanded. Read more: Bank MDs working under increased stress due to default loans, board interference: Experts He also commented that Bangabandhu's dream will not be realised unless they are brought under the law. The independent MP said that those who looted banks are responsible for the rise in commodity prices and inflation. Azad said that he wants to be accountable to the countrymen and voters through this parliament. Azad also said he wants to make the parliament effective and lively through constructive criticism of the government. He expected cooperation of the Speaker in this regard. Read more: Businesses should get opportunities to turn around before wholesale declaration of loan defaulters: FBCCI President

The total amount of debt to the top 20 defaulters is Tk 19,283.93 crore while the amount of defaulted loan is Tk 16,587. 92 crore. Finance Minister AHM Mustafa Kamal divulged the amount in parliament on Tuesday responding to a tabled question from ruling Awami League MP Shahiduzzaman Sarker. The finance minister placed the list the names of top 20 loan defaulters, amount of total debt and the amount of defaulted loans to them. He also informed the House that the total number of defaulters in the country is 7,86,065. According to the list, among the top 20 loan defaulters, the debt status of CLC Power Company Limited is Tk 1,732.92 crore while their defaulted debt is 1,649.44 crore. The debt status and amount of defaulted loan of 19 others are: Western Marine Shipyard Ltd, Tk 1,855.39 crore, defaulted debt, 1529.74 crore; Remex Footwear Ltd, Tk 1,077.63 crore, all those amount are defaulted loans; Rising Steel Company Ltd, 1,142.76 crore, defaulted debt, Tk 990.28 crore; Mohammad Elias Brothers (Pvt.) Ltd, Tk 965.60 crore, all those amount are defaulted loans. Rupali Composite Leather Wire Ltd.'s status and amount of defaulted loans are the same. Their defaulted debt is Tk 873. 29 lakh. Crescent Leathers Products Ltd.'s status and amount of defaulted loans is Tk 855.22 crore. The status and amount of defaulted loans of Quantum Power Systems Ltd. is Tk 811.33 crore. The debt status of Saad Musa Fabrics Ltd. is Tk 1,131.83 crore, the amount of their defaulted loans is Tk 776.63 crore. The status of amount of BR Spinning Mills Ltd. and the amount of defaulted loans is Tk 721 Crore 43 Lakh. The debt status of SA Oil Refinery Ltd. is Tk 1,172.69 crore. The amount of their defaulted loans is Tk 703.53 crore. Debt status of Maisha Property Development Ltd. is Tk 686.14 crore. The amount of their defaulted loans is Tk 663.18 crore. Read more: JP’s Rustum Ali Faraji blasts Finance Minister for his silence on state of economy Debt status of Radium Composite Textile Ltd. is Tk 770.48 crore. The amount of their defaulted loans is Tk 660.42 crore. Debt status of Samannaz Super Oil Ltd. is Tk 1,130.68 crore. The amount of their defaulted loans is Tk 651.7 crore. Manha Precast Technology Ltd.'s debt status and defaulted debt amount is Tk 647.16 crore. Asian Education Ltd.'s debt status is Tk. 653 Crores. The amount of their defaulted loans is Tk 635.94 crore. Debt status of SM Steel Re-Rolling Mills Ltd. is Tk 888.71 crore. Their defaulted loan amount is 630.26 crore. The debt status of Apollo Steel Complex Ltd. is Tk 872.72 crore. The amount of their defaulted loans is Tk 623.34 crore. Debt Status of Ehsan Steel Re-Rolling Ltd. is Tk 624.27 crore. Their defaulted loans amount is Tk 590.23 crore and the debt status of Siddiqui Traders is Tk 670.68 crore while the amount of their defaulted loans is 541.20 crore. In response to a question from reserved seat lawmaker from ruling party Nazma Akhtar, the finance minister told the parliament that there is no plan to waive interest on agricultural loans. Mentioning the reason for this, the minister said that banks give loans to farmers with money collected from depositors. As depositors have to be paid interest, it is not possible for the bank to waive the interest on the loan given to the farmers. Responding to a question from lawmaker Habibur Rahman, Kamal said that no loan has been received so far from the International Monetary Fund (IMF) in the current financial year (2022-23) while negotiations with the IMF regarding a loan are ongoing. “A loan of 300 million US dollars has been received from the World Bank in the current financial year. This loan is repayable in 30 years with a grace period of five years,” he said. Read more: 1st quarter performance of FY22-23 budget satisfactory: Finance Minister Replying a question from the ruling party lawmaker elected from Chattogram Md Abdul Latif's question, the minister said that the Japanese government has released 921.61 million US dollars for the overall development of Bangladesh till December of the current financial year. To a question of Jatiya Party lawmaker Syed Abu Hussain referring to the fact that the tax revenue was less than the target in the last financial year, Kamal said that the desired revenue collection has failed due to the post-Covid economic recession, Russia-Ukraine war, global monetary policy and austerity policy. In response to another question of Latif, he highlighted the various initiatives of the government to reduce the dollar crisis in the parliament. He informed that domestic banking units (local banks) have been given the right to raise foreign currency funds from their offshore banking operations, which will remain in force till June 30, 2023. In order to ensure a sufficient supply of edible oil, chickpeas, pulses, peas, onions, spices, sugar and dates at a bearable level during the month of Ramadan, all these products have been given a 90-day delay payment system to import these products, said the finance minister. It will remain in force till March 31, 2023. He said that with the aim of facilitating trade with China, the opportunity to trade with the country’s currency has been provided.