The Chittagong Chamber of Commerce and Industry (CCCI) has urged Bangladesh Bank to issue clear guidelines allowing banks to accept one-time exit proposals from distressed borrowers, including concessions where necessary, to reduce non-performing loans (NPLs) and restore private-sector credit flow.
CCCI President Mohammad Amirul Haque made the request in a letter to Bangladesh Bank Governor Md Mostaqur Rahman on 25 August, saying banks should implement the objectives of BRPD-1 Circular Letter No 23 for economic recovery.
Amirul Haque said prolonged economic pressures, including the Russia-Ukraine war, taka depreciation against the US dollar, Middle East instability and the impact of Covid-19, have worsened business conditions.
He said hundreds of industrial units failed to start production due to delays in gas and electricity connections, becoming sick industries and defaulting on bank loans. Existing industries were also affected by energy shortages, causing production losses and repayment difficulties.
The CCCI president said previous macroeconomic and banking sector mismanagement pushed NPLs to around Tk5.88 trillion, or 32.25 per cent of total bank credit, creating liquidity pressure and limiting banks’ ability to provide fresh loans.
He warned that Bangladesh’s default loan situation, which he said ranks second globally after war-torn Ukraine, could weaken sovereign credit ratings, discourage foreign investment, limit international financing access and affect business expansion.
Amirul Haque said BRPD-1 Circular Letter No 23 was introduced to provide special exit facilities for indebted industrial units, helping distressed but willing entrepreneurs settle liabilities, regain access to financing and return to the formal economy.
However, he said many banking sector stakeholders were delaying or showing reluctance in accepting one-time exit proposals due to a lack of understanding of the circular’s objectives.
He urged Bangladesh Bank to issue clear directives, saying allowing banks full discretion without central bank guidance could prevent NPLs from declining as intended.
