Bangladesh Bank has taken a positive step for business borrowers affected by political upheaval and other factors, but the decision came only after the economy had already plunged into a severe crisis. Business leaders argue that had such measures been adopted a year earlier, much of the economic damage could have been avoided.
They maintain that entrepreneurs would have been able to continue operations, keeping the economy, the government and the public in better shape. The central bank’s loan rescheduling committee had received more than 1,250 applications, but only around 300 were approved, with the rest left pending for months. Ultimately, the committee has shifted the responsibility of resolving these cases onto individual banks, albeit under certain conditions.
Analysts and business representatives point out that if Bangladesh Bank had granted rescheduling opportunities earlier, trade and industry would have remained more active, many factories would not have shut down, and unemployment would not have risen so sharply. Critics have also questioned why the central bank created disparities among borrowers by approving some 300 applications while leaving the rest unresolved.
Former president of the Dhaka Chamber of Commerce and Industry, Rizwan Rahman, told Bangladesh Pratidin on Thursday that banks should be entrusted with the power to decide on loan rescheduling. “Worldwide, this is the standard practice—banks handle rescheduling, while the central bank oversees operations. Ultimately, only the bank can truly assess the condition of its clients, not the central bank,” he said. He warned that by overstepping its role, the central bank risked stifling banks’ ability to operate effectively.
Rizwan, who is also the vice-chairman of Eastland Insurance PLC, added that placing rescheduling authority in the hands of banks would restore trust among genuine entrepreneurs. “Many businesses are already under severe pressure, facing a collapsing market and burdened by soaring interest rates. Loans once taken at 9 percent under the previous government now carry 16–17 percent repayment rates. This is devastating for businesses,” he said. According to him, the new policy could help small and medium enterprises regain stability, provided the central bank maintains strict oversight.
Mohammad Hatem, president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), welcomed the new policy, saying it would help many entrepreneurs avoid being labelled as defaulters. However, he argued that full authority should have been given to banks rather than creating a central committee. He also suggested extending repayment periods from the current 10 years to at least 15, noting that many firms would still struggle within a decade.
Anis A. Khan, former chairman of the Association of Bankers, Bangladesh (ABB), told Bangladesh Pratidin that many strong entrepreneurs have fallen into default due to the prevailing crisis—some awaiting elections, some absconding, and others in prison. “These are people capable of significantly contributing to GDP and employment. Special facilities were urgently needed to bring them back into the economy,” he said. With elections approaching, he predicted that many business and political figures would now attempt to regularise their loans. While such concessions would normally burden banks, Khan described them as reasonable under current circumstances.
On Tuesday, Bangladesh Bank issued a circular offering distressed borrowers options for loan rescheduling, restructuring, exit facilities for one-time settlements, and support for losses caused by foreign exchange fluctuations.
Since the fall of the Sheikh Hasina government in August last year, 353 factories across Savar, Gazipur, Chattogram, Narayanganj and Narsingdi have shut down, leaving 1,19,842 workers unemployed. Many have returned to their villages in despair after failing to find alternative jobs. Most closures were in the garment, knitwear and textile sectors, according to data from the Department of Factory Inspection, industrial police and other sources. Factory owners cite tighter loan conditions, worker unrest and broader crises as reasons behind the closures.
