Breakthroughs beckon as 60 cases settled, corporates queueing up

Breakthroughs beckon in a current crash course in cleansing piles of non-performing loans as the government-formed   loan -recovery committee has settled at least 60 cases worth more than Tk3.0-billion borrowings while corporates queueing up, insiders said.

After its 13 meetings in last five months, the committee is also on track to settle some other big cases within next couple of meetings, said committee members.

Members of the Bangladesh Bank-formed committee said Saturday they had already recommended at least 60 cases for settlement in different case-specific ways, like allowing defaulters loan-rescheduling opportunity for the last time with a guarantee of repayment, extending the loan-repayment period, and interest waiver for those under business-exit plan.

Meanwhile, more than 1,200 applications of default-loan -settlement cases have been filed with the committee, the sources said.

"Alongside hundreds of small companies, some big-shot corporates and businesses have also queued up with petitions for longer-term loan- repayment facilities from the recovery-support committee formed by the post-uprising government as they want to pay back the overdue and classified loans," says one source.

Among them, at least 60 big corporates have already applied for the settlement of their classified loans with their billions of taka of default loans in different commercial banks and financial institutions, the sources said.

Beximco Group, Gazi Group, Abdul Monem Group, Aman Feed, EnergyPack, Desh Bandhu Group, Zahintex Industries Ltd, Amazing Fashion, and HKG Steel are among the business biggies.

Besides, Universal Yarn, Ershad Brothers, Tampaco Foils Ltd, ZahinTex, Rownak Spinning, Universal Yarn, and Spider Digital Security, among others, are in the queue seeking long-term loan-repayment facilities.

The arbitration panel has already scrutinised more than 150 applications of tycoons holding unpaid credits ranging from Tk500 million to Tk 80 billion in the process of recovery of the credits that have accumulated over the years of lending leniency.

The central bank formed the 'selection committee for policy support to restructure businesses and financial management' on January 30 that sat at least 13 times within its last 5-month period.

The committee reviews whether the applicants with big NPLs or classified loans are willful or non-willful defaulters.

"Some borrowers have already had their loans rescheduled thrice, some are stuck-up for long even after three-time rescheduling, some businesses had already faced losses and some businessmen already closed their businesses after facing losses," a committee member told the FE.

"So, we have recommended different solutions on a case-to-case basis to the default loans aiming to recover those," he said, requesting anonymity.

Among the solutions, they have recommended allowing defaulters loan-rescheduling opportunity for the last time with the guarantee of repayment within the fresh maturity period or extending the loan- repayment period with the concrete assurance, or interest waivers for the business-exit plan, the member added.

"Besides, some big applicants have pledged repaying their non-performing loans (NPLs) and bad loans within an extended repayment period. But we have asked the lending agencies and the borrowers to submit detailed audit reports of their annual revenue earnings and loan -repayment capabilities in the future days," he said.

The panel feels that is impossible to settle those classified loans without justifying their annual revenue earnings and loan-repayment capabilities by engaging reputed international auditors.

Another member of the committee said the corporates and businesses at repayment fault have also been asked to incorporate their lenders-commercial banks and nonbank financial institutions (NBFIs)-into the verification system before getting the loan-repayment-relaxation facilities.

The member of the committee said they won't allow those applications until the annual revenue-earning and loan-repayment plans of those borrowers are validated by internationally reputed audit firms.

"The companies have already applied to us with their revenue-earning and loan-repayment plans seeking long time, but we will not endorse without the justification of their commitment," said the BB-formed committee member.

In most of the cases, the big borrowers have sought some 5-to 10-year loan-repayment timelines with at least one-year grace period.

Many of them have sought waiver of interest for paying the principal of the loans with instalment facilities for long, he added.

And some of the corporates seek loan-rescheduling facilities again after already having their loans rescheduled 2-3 times.

The recovery committee has reviewed the problematic and non-performing loans taken from the country's different commercial banks and financial institutions at its last 13 meetings, insiders said.

At all the meetings, the borrowers as well as banks and NBFIs were present to submit their views.

Bangladesh's non-performing loans (NPLs) hit Tk 4.2 trillion at the end of March 2025, accounting for 24.13 per cent of the total loans worth Tk17.42 trillion disbursed by 61 commercial banks, Bangladesh Bank data showed.

This means that almost one-fourth of the total loans distributed by the banking sector has already become default loans or will be classified as troubled loans.

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