Many businesses with proven track records in Bangladesh are now facing growing financial distress as a rapid surge in non-performing loans in the banking sector, coupled with stricter loan rescheduling policies, has deepened their woes.
While banks have become increasingly cautious about rescheduling defaulted loans to avoid regulatory backlash, more than a thousand borrowers, mostly from export-dependent sectors such as textiles, garments and leather, who are now struggling with working capital shortages, have turned to the central bank in the hope of restructuring their non-performing loans.
But, only a few has got remedy from the central bank so far.
Many of the companies are now unable to keep their operations afloat, leading to mounting daily losses and an uncertain future.
Bangladesh Knitwear Manufacturers and Exporters Association president Mohammad Hatem told 抖阴精品 that many well-performing companies were forced to shut down their operations after banks refused to reschedule their loans.
鈥榃e received no effective response from the central bank despite sending formal letters and seeking a meeting with the governor,鈥� he said.
On the loan rescheduling committee that the Bangladesh Bank formed on January 30, Hatem said that he was unaware of such a body, as the central bank did not consult or engage with industry stakeholders on the matter.
A medical product producing company had been a loyal client of IFIC Bank for over 25 years without ever defaulting on a loan until mid-2024, according to an industry insider.
However, the bank allegedly refused to renew the company鈥檚 credit facilities, pushing it into default, he said.
The forced default severely disrupted the company鈥檚 operations and caused financial losses, effectively turning a once-reliable borrower into a defaulter and leaving a substantial amount of money unpaid and locked, the industry insider added.
According to BB officials, although the Bangladesh Bank no longer approves or rejects loan rescheduling applications 鈥� leaving that responsibility entirely to respective banks, it launched a special initiative earlier this year to assist large borrowers who defaulted due to circumstances beyond their control.
On January 30, the central bank formed a five-member committee to assess applications for restructuring defaulted loans exceeding Tk聽50 crore. Since then, about 1,253 firms have applied for relief under the initiative.
The committee鈥檚 role is to assess whether borrowers were genuinely affected by external shocks like the Covid pandemic, Russia-Ukraine war, or economic crises or political turmoil, and determine whether any restructuring or policy support could help revive their businesses.
Under the initiative, only 80 firms have so far received measures such as loan rescheduling and rescheduling with reduced down payments, and interest payment waivers.
Among the firms, most of them were from large business groups as the committee is giving priority to large groups for the stability of the country鈥檚 economy.
Firms of Abdul Monem, Rising Group, Apex Textile and Masihata Group have received the facilities from the BB committee.
Moreover, the loan rescheduling facilities were largely granted on political grounds, BB officials said, adding that many businesses linked to the Bangladesh Nationalist Party and other major opposition parties during the authoritarian Awami League regime, which was ousted in August 2024 in a mass uprising, had faced hardship and business losses.
Therefore, small-scale businesses are suffering for the committee鈥檚 delay in making decisions about their applications as the entities are facing hardships during their day to day operational activities.
Bangladesh Garment Manufacturers and Exporters Association president Mahmud Hasan Khan said that several member companies had complained that the committee鈥檚 process was too slow.
At the current pace, it could take two to three years to complete their applications.
鈥楥ompanies need immediate responses to whether their applications are accepted so that they can plan their next steps. Without clarity over the issue, many risk losing their operational capacity,鈥� he said.
He urged the central bank to expedite the process by any means necessary.
Businesses said that the committee鈥檚 inability to resolve the remaining applications had left distressed borrowers in limbo.
The lack of cash flow is leading to production halts, staff layoffs and growing arrears to suppliers, further weakening the economies鈥� productive base.
Experts said that the Bangladesh Bank must prioritise the committee鈥檚 operations, enforcing tougher eligibility checks, and empowering banks to handle straightforward cases independently.
Syed Abu Naser Bukhtear Ahmed, chairman of Agrani Bank, claimed that his bank continued rescheduling loans as per the rescheduling policy of the Bangladesh Bank.
Regarding the BB rescheduling committee, he said that about 15 large borrowers of Agrani Bank applied to the committee and of them, three received the special facilities.
Bangladesh Bank spokesperson Areif Hossain Khan, an executive director of the central bank, told 抖阴精品 that the initiative was launched to revive genuinely affected businesses whose default status resulted from factors beyond their control.
He pointed to the overwhelming volume of applications and the complexity of the screening process, citing the need to evaluate each applicant鈥檚 financial behaviour, sectoral viability and borrowing history.
Adding to the complexity, most of the large borrowers have loans from multiple banks, making consensus of the lenders difficult, he said.
He, however, assured that genuine borrowers would receive support and that decisions were being finalised as quickly as possible.
Some entrepreneurs have expressed frustration over the delays, saying that factory conditions are deteriorating as cash flow declined. Unless loan restructuring decisions are taken swiftly, even approved support may become ineffective, especially for businesses already on the brink of collapse.
They also said that the economic and political crises had disproportionately harmed genuine borrowers, who deserve priority over those exploiting rescheduling for political or personal gain.
The coordination gap among banks is also contributing to the delay.
Borrowers who obtained loans from more than one bank said that while some lenders had expressed readiness for restructuring, others remained unresponsive, delaying final approvals.
The rising NPLs, which surged from Tk 1.82 lakh crore in March 2024 to Tk 4.20 lakh crore in March 2025, now account for 24.13 per cent of total loans, positioning Bangladesh as South Asia鈥檚 worst-performing banking system.
The soaring NPLs could deteriorate the situation further and therefore need immediate measures to contain the surge.
BB officials also said that many of the applications received were from ineligible borrowers, including wilful defaulters who had previously misused the rescheduling facilities.
They said that during the Awami League-led government鈥檚 tenure, rescheduling rules were frequently abused to protect politically connected defaulters.
Between 2023 and 2024, banks rescheduled Tk 1,19,164 crore in defaulted loans, often to borrowers who had little intention of repayment and used repeated rescheduling to remain eligible for public contracts or elections.
Distinguishing between genuine defaulters and those who deliberately exploited the system remains a key challenge for the central bank鈥檚 committee, the officials said.
