Bangladesh Bank (BB) has introduced a comprehensive 7-point action plan to address the country's high level of non-performing loans (NPLs), which stood at 11.11% of total outstanding loans as of March 2026, according to BB data. The plan aims to bring the NPL ratio down to 10% by December 2026.
The seven points include: strengthening loan classification and provisioning rules, enhancing recovery mechanisms through specialized courts, promoting out-of-court settlements, improving credit risk management, increasing transparency in loan reporting, tightening oversight of large loan accounts, and incentivizing banks to resolve bad loans quickly. BB Governor Abdur Rouf Talukder announced the plan on June 30, 2026, during a meeting with bank CEOs.
Key measures involve the establishment of a centralized NPL database and the introduction of a time-bound framework for loan recovery. Banks with high NPL ratios will face stricter regulatory scrutiny and higher provisioning requirements. The plan also encourages the use of asset management companies to purchase distressed loans.
Industry analysts note that previous efforts to reduce NPLs have had limited success, with the ratio fluctuating between 8% and 12% over the past five years. However, BB officials express confidence that the new measures, combined with improved economic conditions, will yield results. The banking sector's gross NPLs totaled Tk 1.45 lakh crore as of March 2026.
