The central bank is set to introduce a new oversight mechanism where it will directly verify corporate loans before they are approved by commercial banks, signalling a move to bolster pre-emptive controls against defaulted loans.
Governor Md Mostaqur Rahman shared this initiative during an exchange meeting with business editors of private television channels on Wednesday.
Briefing reporters on the governor’s position, Bangladesh Bank spokesperson and Executive Director Arief Hossain Khan stated that while large corporate loans are currently disbursed by commercial banks, the central bank is considering a system to verify these loans beforehand.
“The framework, methodology, or the recruitment of necessary skilled manpower for this verification process is yet to be determined,” Khan added, noting that the initiative is currently at a policy stage.
The advance announcement serves as a warning to banks, with a formal policy to be issued once finalised.
Central bank officials observed that bankers often recognise potentially risky loans but approve them due to external influence or vested interests. The new measure intends to mitigate such risks before disbursement, though no specific timeline for implementation has been set.
During the meeting, Mostaqur noted that while foreign exchange reserves are in a relatively stable position, inflation remains unsatisfactory. He also highlighted challenges regarding the employment crisis and the impact of ongoing conflicts in the Middle East.
Tensions surrounding the Strait of Hormuz due to the Iran war have pushed global fuel prices higher, leading to supply pressures and long queues at petrol pumps across Bangladesh.
The central bank is currently seeking advice from various stakeholders to manage the fallout of the Middle East crisis, following a similar meeting held last Sunday with editors from national dailies, online portals, and news agencies.
Journalists at the meeting suggested implementing short and long-term plans, adjusting fuel prices in line with high inflation, and exercising restraint in dollar spending to maintain reserves.
Responding to these concerns, the governor admitted that political influence had historically hindered good governance in the banking sector but asserted that such interference would not be tolerated in the future.
Mostaqur also announced that the use of “Bangla QR” codes for purchases and transactions will become mandatory from July.
Meanwhile, Khan explained that the first two months would focus on raising awareness without imposing penalties, followed by high fines for non-compliance thereafter.
Plans are also underway to provide training to officials of the Directorate of National Consumer Rights Protection on this matter.
This strategy follows earlier plans by former governor Ahsan H Mansur, who on 26 January proposed reducing corporate lending to control defaults and develop the bond market.
Under current regulations, a bank’s exposure to a single borrower is limited to 25 per cent of its capital – comprising 15 per cent funded and 10 percent non-funded loans – though these limits remain relaxed for the power, energy, and green finance sectors.
