Bangladesh’s listed companies have urged the central bank to rethink how credit risk is assessed across corporate groups, arguing that financially sound businesses are increasingly facing financing constraints because of problems elsewhere within their ownership structures.
The Bangladesh Association of Publicly Listed Companies (BAPLC) raised the concerns during a meeting with Bangladesh Bank Governor Md Mostaqur Rahman on Monday, warning that existing Credit Information Bureau (CIB) practices may be creating unintended obstacles for compliant listed firms seeking bank financing.
A central concern was the treatment of nominee directors and the impact of adverse CIB records of nominating institutions on listed companies where those directors serve.
The BAPLC delegation, led by its President Riad Mahmud and participated by Vice President Syed Ishtiaq Ahmed, argued that listed firms should not face operational or lending disadvantages because of the credit status of parent or nominating institutions when the companies themselves remain financially sound and compliant.
The association also questioned broader group-level credit assessments, saying banks and financial institutions often evaluate credit exposure across connected entities rather than focusing on the financial condition of individual companies.
According to BAPLC, the poor CIB record of a sponsor, director or guarantor can affect multiple associated companies, causing financing restrictions even when those firms maintain strong financial fundamentals.
Such practices can lead to restricted access to credit, higher borrowing costs, stricter lending conditions, delays in loan approvals, reputational pressure and constraints on business expansion and investment.
It called for a more balanced, entity-specific approach to credit evaluation, arguing that corporate borrowers should be judged primarily on their own financial position, governance standards and repayment capacity.
The issue has become increasingly important as businesses seek financing in a banking sector that has tightened risk assessments amid concerns over asset quality and loan recovery.
Beyond credit reporting, the delegation also pressed for changes to industrial financing policies.
While welcoming the government’s Factory Revival Fund, BAPLC proposed extending the facility to restructured but operational factories facing severe working-capital shortages.
The association said many such businesses retain production capacity and manpower but are unable to operate efficiently because of liquidity constraints, leaving them at risk of becoming non-operational.
Expanding access to the fund would help sustain industrial output, protect employment and prevent viable industries from shutting down, the association said.
The discussion also touched on a broader structural issue in Bangladesh’s financial system – the dominance of banks in long-term industrial financing.
BAPLC proposed that scheduled banks be discouraged from providing long-term industrial loans except in exceptional cases, arguing that equity and debt instruments in the capital market are better suited to meeting long-term funding requirements.
Such a shift would help deepen the capital market, diversify financing sources and reduce asset-liability mismatches in the banking sector, the association said. It also argued that greater reliance on capital-market financing could help mitigate non-performing loan risks associated with long-term lending exposure.
The proposals reflect growing efforts by listed companies to secure more predictable access to financing at a time when many businesses are navigating tighter credit conditions and elevated funding costs.
The meeting underscored the challenge of balancing prudent risk management with the need to ensure that healthy companies are not denied financing because of weaknesses elsewhere within a corporate group.
Governor Md Mostaqur Rahman listened to the concerns raised by the delegation and assured that the issues would receive due consideration, according to BAPLC.
