Legal reforms underway to recover assets, curb rising default loans: BB governor
Mansur said a “ring-fencing” strategy is being applied to large industrial defaulters, including those owing several thousand crore taka.
Extensive legal reforms are now in progress to address the country's mounting default loan crisis, with coordinated efforts launched to recover assets both at home and abroad, Bangladesh Bank Governor Ahsan Habib Mansur said today (8 December).
Speaking at a seminar marking the release of two key publications, 'State of Bangladesh Economy 2025' and 'SDGs: Bangladesh Progress Report 2025', at the NEC Conference Room in the capital's Sher-e-Bangla Nagar, the governor described a series of measures already set in motion to strengthen the financial sector and restore discipline.
He noted that domestic recovery initiatives include seizing the properties of loan defaulters, confiscating their bank shares, and taking control of other assets.
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For international asset recovery, the governor said Bangladesh has signed agreements with global legal firms in addition to mobilising government agencies to pursue legal procedures abroad.
Mansur said a "ring-fencing" strategy is being applied to large industrial defaulters, including those owing several thousand crore taka.
"This approach keeps their operations running through tightly monitored operational financing while preventing management from extracting any undue benefits," he said.
The aim, he explained, is to safeguard workers, maintain production, and ensure that economic activities continue feeding back into the broader system. Although he expects the recovery process to succeed, he acknowledged that asset retrieval will take time.
Mansur emphasised that financial sector stability and improved governance remain central to the reform agenda. He pointed out that liquidity stress, inadequate capital buffers, and longstanding governance weaknesses have plagued the banking industry. To reverse this trend, the central bank has prioritised strict enforcement of transparency and good governance, he said.
He added that Bangladesh Bank has opted to disclose all information, however uncomfortable, to ensure full transparency.
"As part of a tougher governance framework, banks facing losses or capital shortfalls will be barred from issuing dividends or awarding bonuses to employees. The Bank Resolution Ordinance, now approaching implementation, will pave the way for resolution proceedings for three banks and nine non-bank financial institutions [NBFIs]," he added.
