Bangladesh Trial Report:

The amount of defaulted loans in state-owned banks has risen to around Tk 188,701.75 crore. The government is implementing various short-, medium- and long-term plans to reduce defaulted loans and restore discipline in the banking sector.

Finance Minister Amir Khosru Mahmud Chowdhury disclosed the information on Sunday (July 12) in response to a supplementary question from reserved-seat MP Sabikun Nahar on the 23rd working day of the second session—the first budget session—of the 13th Jatiya Sangsad.

Speaking at the session chaired by Speaker Major (Retd) Hafiz Uddin Ahmad Bir Bikram, the finance minister said the figure had been prepared based on information submitted by nine state-owned banks to the Bangladesh Bank’s CIB database as of May 31.

The banks are Agrani Bank PLC, Janata Bank PLC, Rupali Bank PLC, Sonali Bank PLC, BASIC Bank PLC, Bangladesh Development Bank PLC, Bangladesh Krishi Bank, Rajshahi Krishi Unnayan Bank and Probashi Kallyan Bank.

The finance minister said reducing the high rate of defaulted loans was essential to restore discipline in the banking sector. He said the issue had also been given special importance in the current government’s election manifesto.

Against this backdrop, Bangladesh Bank has adopted short-, medium- and long-term action plans, he said.

He said that in the short term, guidelines on classified loan resolution strategies for banks are being formulated, while guidelines on credit risk management are being updated in line with international standards.

Under the medium-term plan, initiatives have been taken to implement International Financial Reporting Standard (IFRS-9) in the banking sector, assess loan collateral through listed companies, update the agricultural loan rescheduling policy, provide special incentives to bank officials for recovering defaulted loans, and improve the existing incentive policy for regular loan repayments.

As part of the long-term plan, work is underway to set a maximum limit on the amount a single borrower can obtain from the entire banking sector, take strict action against willful defaulters, include experienced bankers on the panels of judges at money loan courts, prevent delays in loan recovery proceedings through writ petitions, and enact the necessary legislation to establish private-sector asset management companies, he said.

The finance minister further said the government had enacted the Bank Resolution Act, 2026 for effective management of troubled banks. An initiative has also been taken to enact the Deposit Protection Act, 2026 to safeguard the interests of depositors.

He also said amendments to the Bangladesh Bank, Insurance Development and Regulatory Authority (IDRA) and Bangladesh Securities and Exchange Commission (BSEC) laws had been enacted, while amendments to the Negotiable Instruments Act had made the adjudication of cheque fraud and cheque dishonour cases more effective.

According to the finance minister, the government is working to restore discipline in the financial sector through a strong legal framework, a transparent resolution process and protection of depositors’ interests.