Even after five and a half months of forming a committee to assist with large loans, there has been no substantial progress. Time is being spent on verification. Although 1,253 applications have been submitted during this period, the committee has only reviewed about 100 of them. Yet, not a single file has been finalised.
As a result, large industrial groups are becoming unintentional defaulters and not receiving the expected support from the central bank, pushing many closer to collapse. Some are even on the verge of shutting down, risking massive job losses.
Data shows the country’s industrial sector is facing a severe crisis. Political transitions, instability, deteriorating law and order, high loan interest rates, the unchecked rise of the dollar and a lack of confidence have all contributed to a major economic slowdown. Added to this is the burden of the IMF’s conditions. With the IMF reducing loan repayment grace periods from six months to three, defaulted loans have surged, severely impacting genuine industrial entrepreneurs.
Due to the recession, they are unable to repay instalments on time and are thus being labelled as defaulters through legal technicalities.
Some top industrial groups, despite their high production capacities, large workforce and significant tax contributions, are facing serious challenges to continue operations.
Concerned by the situation, the government directed the central bank in January to form a committee to assess the involuntary defaults of industrial groups with loans over Tk50 crore and offer them special policy support. The committee was tasked with identifying genuine defaulters who could maintain normal operations if given support.
Following its formation, the committee invited applications from affected borrowers, which received a huge response.
According to the central bank, 1,253 applications were submitted in 5.5 months, meaning over 1,250 industrial entities are seeking policy support due to involuntary default.
If real victims are identified and provided with policy relief, these industries could recover and help revive the economy.
However, sources said that the committee has made little progress. In 13 meetings, they reviewed only about 100 files and have yet to resolve even one. In effect, very little has been achieved.
Many affected groups are now at risk of closure and have contacted the central bank in various ways but are yet to find a solution. The central bank says that after meetings, the 100 or so reviewed files have been forwarded to the respective banks. Final restructuring decisions (rescheduling) will now depend on bank-customer negotiations and condition fulfilment.
Committee Member Secretary Shahriar Siddiqui, also a director at Bangladesh Bank, said, “We have reviewed over 100 cases and handed them to the respective banks. Now the final decision will depend on mutual agreement between banks and customers. We are working to complete the review of the remaining cases quickly. The full situation will be shared with the media.”
It is the responsibility of lending banks and financial institutions to finalise these applications. However, sources say not a single case has been resolved so far. While some banks have started the process, others are delaying it.
According to the central bank, only those whose loans defaulted by 30 September 2023, are eligible to apply. At that time, total defaulted loans stood at Tk2.85 trillion. By December 2023, defaults had increased to Tk3.46 trillion (20.20% of total loans). In just the first three months of 2024, defaults surged by another Tk745.91 billion, bringing the total to Tk4.2 trillion – now 24.13% of all distributed loans.
Central bank officials defend the delays by citing complications: many applicants broke the 30 January conditions laid out by the Banking Regulations and Policy Department. Others who are not defaulters also applied to restructure and extend their loan terms. This makes the verification process difficult.
Bangladesh Bank Governor Dr Ahsan H Mansur said, “It is very difficult for a single committee to verify and make decisions on over a thousand applications. We are considering increasing the number of committees. To protect the economy and the banking sector, bad loans must be reduced. For years, loans distributed through irregularities were covered up, but now international auditors and central bank inspections are exposing them. However, we want to support genuinely struggling borrowers who have defaulted for valid reasons.”
The five-member committee was initially headed by Executive Director Mezbaul Haque, responsible for off-site supervision. He has since been transferred to the Rajshahi branch, and Sirajul Islam now holds the role. Other members include Dr Delowar Hossain (joint secretary, Financial Institutions Division), economist Mamun Rashid, and businessman Abdul Haque (from Haque’s Bay Company). Director Shahriar Siddiqui serves as a member secretary.
There is no set term for the committee, though they can claim allowances for up to two meetings per month.
Economists have advised vigilance to prevent powerful individuals from misusing the support. They also recommend simultaneously identifying and recovering funds from wilful defaulters.
However, the committee’s original head, Mezbaul Haque, has faced serious allegations. He was banned from leaving the country due to involvement in the Bangladesh Bank reserve heist and is accused of destroying digital evidence.
Crime Investigation Department’s (CID) investigation into the 2016 reserve theft found that 12 senior central bank officials, including Mezbaul, were responsible for negligence. Notably, he brought two foreign IT firms to the crime scene without informing any local authorities, resulting in the loss of key evidence.
On the night of 4 February 2016, $81 million was stolen from Bangladesh Bank’s reserve at the New York Federal Reserve using fraudulent SWIFT transactions. The money was routed to four accounts in Rizal Bank, Makati City, Philippines and quickly withdrawn. Only $15 million was later recovered; $66 million (Tk5.61 billion) remains missing.
A police case was filed 39 days later. The CID is still handling the investigation.
Mezbaul Haque has also been accused of irregularly approving the Nagad mobile financial service, launching the Binimoy app to gain the confidence of former prime minister Sheikh Hasina’s son Sajeeb Wazed Joy, and in 2024, banning journalists from entering Bangladesh Bank premises.
Bd-pratidin English/TR
