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BB asks banks to downsize NPL below 25 percent by March next

Classified loan drops below 31 percent until December

Written by The Banking Post


Bangladesh Bank (BB) has asked the commercial banks to further intensify their efforts in settling policy support-related affairs for struggling businesses to lessen buildups of classified loans in banking sector below 25 per cent by March next.

The central bank governor Dr. Ahsan H. Mansur made the directive to top executives in the country’s all commercial banks at a special bankers’ meeting held on Sunday at BB headquarters, according to the meeting insiders.

In the meeting, the governor also hailed the commercial bankers for their efforts in bringing down NPLs (non-performing loans) pressures below 31 per cent until December last riding on the various regulatory interventions like policy support and partial write-off facilities from September’s count of 35.73 per cent.

Bankers meeting with the central bank high-ups usually take place in every three months to discuss current issues focusing on policy, innovation, strategy, performance review and professional development to address industry challenges and growth in Bangladesh’s evolving financial sector. But the last bankers meeting was held on early December last.

Seeking anonymity, a BB official who attended the meeting said this was a special bankers’ meeting where issues of NPLs, inflation, policy rate and upcoming referendum were discussed.

Citing the BB governor, the central banker said the commercial banks using almost half of existing policy support and other facilities managed to come down the ratio of NPLs significantly by the end of last month.

“The governor instructed the bankers to further intensify their efforts to bring it down to 25 per cent by March next,” he added.

When contacted, chairman of the Association of Bankers, Bangladesh (ABB), the apex body of the country’s commercial bank executives, Mashrur Arefin said the meeting was good and very time-befitting one.

Sharing current state of the NPLs scenario, he said, the governor hailed the commercial banks to cut NPLs down to 30.46 per cent until December last from 35.73 per cent recorded by September, 2025.

If the NPLs of the merged five Islamic banks are considered, the ratio of the classified loans in the banking system is now 24.53, the ABB chief said citing the central bank statistics.

Apart from that, the seasoned banker said the commercial banks were also asked for giving serious attention in terms of lending for agriculture, small and macro segment borrowers alongside school banking in the coming days.

Mr. Arefin, also managing director and chief executive officer of City Bank PLC, said the banking regulator wants to liberalise the market with facilitating outbound investment in small-scale and inbound investment here.

“The BB is planning to revive the foreign exchange regulation act (FERA) soon,” he added.

Managing director and chief executive officer of Mutual Trust Bank (MTB) PLC Syed Mahbubur Rahman said the issue of inflation and policy rate also discussed in the meeting.

As the inflation keeps rising in very recent months, he said, the governor made a hint that the policy rate might remain unchanged in the coming monetary policy statement (MPS) for last half in this FY’26.

According to the BB, the upcoming MPS is expected to be disclosed on January 29 next.

According to the meeting insiders, the possibility of facilitating yes-vote campaigning by the banks in the upcoming referendum was also discussed.

Simultaneously, the issue of relaxing single borrowers’ exposure limit for the LPG importers for short period of time considering the current market crisis was also discussed, according to them.


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