Bangladesh Bank Governor Dr Ahsan H. Mansur has said the central bank is working to restructure loans for businesses affected by the Covid-19 pandemic, economic downturn, and political unrest.

Speaking as a special guest at a Centre for Policy Dialogue (CPD) discussion in Dhaka on Sunday, titled “365 Days of the Interim Government”, Dr Mansur said many enterprises had suffered significant losses due to these factors.

He said that the central bank had so far received more than 1,200 applications for loan restructuring, of which 250 had been resolved while the rest were under process. 

Each case, he said, was being assessed individually by Bangladesh Bank, the lending commercial bank, and the applicant, to prevent any misuse of the facility. 

Approval is being given only after reviewing the firm’s current condition, possible solutions, and past record.

On non-performing loans, Dr Mansur said the classification period had been reduced from six months to three months, a move initially resisted by banks and borrowers but now accepted. 

For the first time, a strict policy has been enforced requiring banks to maintain full provisioning before declaring dividends to shareholders. Banks that failed to meet the 100% provisioning requirement or the minimum 10% capital adequacy ratio have been barred from paying dividends.

The governor said fundamental amendments were being prepared to the Bangladesh Bank Order of 1972 to strengthen the financial sector, stressing that both strong leadership and legal authority were essential. 

Political interference and bureaucratic obstacles, he added, must be removed to enhance the bank’s autonomy and accountability, with safeguards to prevent future political abuse.

He also announced that the deposit insurance limit would be raised from Tk 1,00,000 to Tk 2,00,000, and a bank resolution policy was being formulated to allow Bangladesh Bank to intervene directly if a bank faced liquidity crises or serious governance issues. A proposal had been made to unify regulatory oversight for both state-owned and private banks.

To reduce loan defaults, Dr Mansur said steps were being taken to amend laws to prevent high court writ petitions from stalling recovery processes, with a meeting planned with the chief justice on the issue.

The event was chaired by CPD Distinguished Fellow Dr Mostafizur Rahman. Labour and Employment Affairs Adviser Brig Gen (retd) M Sakhawat Hossain attended as chief guest, while BNP Standing Committee Member Amir Khosru Mahmud Chowdhury was also present. 

CPD Executive Director Dr Fahmida Khatun presented the keynote.

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