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Bangladesh Bank governor Dr. Ahsan H Mansur has instructed commercial banks to immediately create forced loans against importers who fail to meet payment obligations on their maturity dates.

The directive was issued during a bankers’ meeting held on Tuesday (8 July). Meeting insiders revealed the Governor acted upon reports that some banks were not complying with existing regulations requiring forced loans. This non-compliance, BB warned, risks reputational damage for Bangladesh in international trade finance circles by potentially causing payment delays overseas.

“Existing circulars clearly instruct banks to create forced loans against importers defaulting on payments. A concerning number of institutions are disregarding this rule, attempting alternative clearance methods,” stated an anonymous BB official present at the meeting. “The Governor emphasized strict adherence to avert potential reputational harm stemming from payment delays.”

Combating Money Laundering & Promoting Digital Payments:
The central bank also urged heightened vigilance against money laundering via export under-invoicing. Syed Mahbubur Rahman, Managing Director & CEO of Mutual Trust Bank PLC (MTB), confirmed emerging from the meeting: “Bangladesh Bank instructed bankers to remain alert to prevent any potential money laundering through under-invoicing of exports.”

Furthermore, to reduce cash usage, the central bank advised commercial lenders to actively promote digital payment tools. “The regulator suggested banks create public awareness campaigns to popularise digital payments, supporting the broader objective of a cashless society,” Syed Mahbubur Rahman added.

Economic Outlook & Banking Operations:
Regarding inflation, Mahbubur Rahman relayed the central bank’s assessment: “BB informed us inflationary pressure has started declining in recent months, although the target has not yet been achieved. However, the central bank expressed confidence in bringing inflation down to its target in the coming months.”

The meeting also addressed commercial banks’ over-reliance on government securities. The banking regulator advised lenders to distribute holdings of treasury bills and bonds to the retail level, aiming to alleviate liquidity pressures on the banking sector.

Special Fund for Uprising Victims:
Meeting sources confirmed Bangladesh Bank shared plans for a Tk 25 crore (250 million) special fund. This fund will support families of individuals killed and cover treatment costs for those injured during the July 2024 mass uprising. Bangladesh Bank will contribute Tk 14 crore (140 million) from its own resources, with commercial banks requested to provide the remaining Tk 11 crore (110 million).