Written by The Banking Post
Finance Adviser Dr Salehuddin Ahmed has asked the heads of six state-owned commercial banks (SoCBs) to step up efforts to recover their massive pile of default loans.
At a meeting on Wednesday at the Finance Division, Dr Ahmed stressed the need for good governance in the banks and warned against interference by boards in day-to-day operations. “All activities should be carried out on commercial merit,” he said, urging the banks to act decisively.
Officials from the Financial Institutions Division (FID) and Bangladesh Bank briefed him on the financial health of the banks as of June. The report painted a grim picture: the six SoCBs are sitting on Tk 1.49 trillion in non-performing loans, making up 44 per cent of their total disbursed loans.
Alarmingly, about Tk 850 billion—57 per cent of the bad loans—are tied up with just 20 top defaulters. Dr Ahmed directed the banks to intensify monitoring of these borrowers and prioritise recovery.
The meeting also revealed around 48,000 pending court cases linked to default loans. To speed up settlements, Dr Ahmed asked the banks to strengthen their legal departments and the FID to work with the Attorney General’s office to ensure lawyers actively pursue hearings.
Audit objections and written-off loans also came under discussion. The adviser pressed bank management to show more sincerity in recovering stuck funds and urged the central bank and FID to modernise the insolvency framework in line with the Bank Resolution Act.
The idea of forming a special tribunal for loan recovery, similar to models in India, Pakistan, Sri Lanka, and Malaysia, was discussed but no decision was taken.
Despite the challenges, officials noted some positive signs—deposits in all six banks rose in the first half of the year. Dr Ahmed asked them to quickly channel these funds into productive sectors such as industry and job creation to support economic recovery.
