BB directs banks to cut NPLs by December
The Bangladesh Bank has instructed all commercial banks to take effective measures to reduce non-performing loans (NPLs) by December 2025, aiming to strengthen the country's banking sector and ensure sustainable credit growth.
The directive was issued during a meeting between Deputy Governor Kabir Ahmed and the managing directors (MDs) of various banks at the central bank headquarters yesterday.
Confirming the development to TBS, Md Touhidul Alam Khan, managing director and CEO of NRBC Bank, said, "The Bangladesh Bank directed all banks to make concerted efforts to significantly reduce NPLs by December 2025, in strict adherence to the central bank's rules and regulations."
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Touhidul added that the central bank has recently issued comprehensive circulars enabling banks to adopt a proactive approach to managing NPLs. These circulars authorise banks to reschedule or restructure non-performing loans through negotiations with borrowers within the regulatory framework, he said.
"This initiative is expected to support distressed borrowers while ensuring prudent banking practices and maintaining financial discipline across the sector," Touhidul said.
Another bank MD who attended the meeting told this newspaper that the central bank expressed concern over the rise in NPLs up to September. Officials from the Bangladesh Bank asked the MDs whether the policy support already provided had been effective in reducing the volume of defaulted loans.
"Many banks reported that they have already taken initiatives to bring down NPLs," the managing director said.
The Bangladesh Bank emphasised the need for strong recovery drives, alongside other measures such as writing off irrecoverable loans and rescheduling viable ones to reduce the overall burden of bad debt.
Meanwhile, another bank chief said, "In accordance with the recent policy issued by the Bangladesh Bank regarding the write-off of loans, we have given our clients a one-month notice. That matter has also been communicated to the Bangladesh Bank at the meeting."
