Bangladesh Bank grants major relief to large loan defaulters

Bangladesh Bank has granted substantial concessions to the country’s largest loan defaulters—specifically targeting individuals and entities with defaulted loans exceeding Tk1,000 crore. Under this facility, eligible borrowers can reschedule or renew their loans for up to 15 years, including a 2-year grace period during which no payments are required. Borrowers with defaulted loans below Tk 1,000 crore will not qualify for this benefit. The central bank issued a circular regarding this policy on Monday.

According to the circular, interested borrowers must submit their applications by September.

Concerned banks must resolve these applications by December. Borrowers who previously received benefits under Bangladesh Bank's policy support are also eligible to reapply, though any repayment period previously granted under special restructuring schemes must be deducted from the new timeframe.

Central bank officials insisted that this facility was reintroduced to reduce default loans and keep industrial plants operational. Production has been hit hard by ongoing gas and electricity shortages, causing the loans of several large industrial conglomerates to turn bad, they explain. This extra leverage for defaulters exceeding Tk 1,000 crore was primarily designed to support those large groups.