Interim Govt Moves to Fast-Track Tk 38,000 Crore Bad Loan Cases

Dhaka, September 5, 2025: The interim government has initiated steps to expedite long-pending lawsuits filed by 10 institutions, including state-owned banks and a non-bank financial institution (NBFI), against loan defaulters to accelerate the recovery of defaulted loans worth Tk 38,000 crore. The decision was made during a meeting between the Ministry of Finance and senior officials from the plaintiff institutions, sources confirmed.

As part of the initiative, 100 lawsuits involving bad loans have been identified, many of which have been stuck in courts for years, hindering lenders from taking action against defaulters. Nazma Mubarak, secretary of the Financial Institutions Division (FID) under the Ministry of Finance, said, “We will write to the Ministry of Law, the Attorney General’s office, and deputy commissioners to speed up the legal process of these cases.” She added that deputy commissioners would handle certificate cases.

The institutions involved include Janata Bank, Sonali Bank, Agrani Bank, Bangladesh Krishi Bank, Rupali Bank, BASIC Bank, Bangladesh Development Bank, Rajshahi Krishi Unnayan Bank, the Investment Corporation of Bangladesh, and the Bangladesh Securities and Exchange Commission. Each institution will submit a list of its 10 biggest pending cases to the FID for coordinated efforts to resolve them swiftly. To ensure progress, the institutions will appoint dedicated officials to monitor the lawsuits, and a senior executive will hold monthly review meetings to report updates to the FID. The aim is to resolve cases quickly, enabling lenders to sell defaulters’ assets and recover funds. The scale of the problem is significant. Janata Bank has Tk 15,151 crore tied up in its 10 biggest cases, followed by Sonali Bank (Tk 5,676 crore), Agrani Bank (Tk 3,979 crore), and Rupali Bank (Tk 3,747 crore). The banking sector is grappling with a massive non-performing loan (NPL) crisis, with distressed loans reaching Tk 756,526 crore in 2024, including Tk 345,765 crore in defaults, Tk 348,461 crore in rescheduled loans, and Tk 62,300 crore in written-off loans, according to Bangladesh Bank.

A task force on economic reforms reported that, as of February 2024, Tk 178,277 crore was stuck in 72,543 cases. The report highlighted backlogs under the Money Loan Court Act and Bankruptcy Act as major obstacles, compounded by structural flaws in the Money Loan Court Act, 2003, which allows mediation only after litigation begins. Additionally, a low judge-to-population ratio and insufficient courtroom facilities have created bottlenecks in resolving NPL-related cases.