Real NPL figure is more than 35pc, uncomfortable but truthful: BB Governor

Business Report :

The actual non-performing loan (NPL) situation had long been understated. We brought transparency and the real NPL figure is more than 35 percent-uncomfortable but truthful, Bangladesh Bank Governor Ahsan Habib Mansur said on Monday.
The central bank governor informed that extensive legal reforms are now in progress to address the country’s mounting default loan crisis, with coordinated efforts launched to recover assets both at home and abroad.
Speaking at a seminar marking the release of two key publications, ‘State of Bangladesh Economy 2025’ and ‘SDGs: Bangladesh Progress Report 2025’, at the NEC Conference Room in the capital’s Sher-e-Bangla Nagar, the governor described a series of measures already set in motion to strengthen the financial sector and restore discipline.
The General Economics Division (GED) of the Planning Commission organised the event.
Mansur also noted that the domestic recovery initiatives include seizing the properties of loan defaulters, confiscating their bank shares, and taking control of other assets. For international asset recovery, Bangladesh has signed agreements with global legal firms in addition to mobilising government agencies to pursue legal procedures abroad.
The governor said when he assumed office, the country was battling rapidly depreciating currency, declining reserves, rising non-performing loans, liquidity stress and disrupted trade flows.”I was always convinced that without stabilizing the exchange rate, we would never win the fight against inflation.”
He added that the exchange rate was around Tk 120 per dollar when he took office has since stabilised under a fully market-based system.
“Reserves that had dropped to around US$17 billion have increased by around US$10 billion in one year,” he said.
The governor made it clear that there is no scope for an immediate reduction in interest rates.
Despite inflation falling from 12.5 percent to just over 8 percent, he stressed the need to maintain a slightly positive real policy rate.
“Monetary policy will remain fully market-driven. Administrative control over interest rates is not an option,” he said.
He also pointed out that the government’s borrowing requirements have put pressure on the money market, but Bangladesh Bank has strictly avoided money printing.
While speaking at the same event, former Chairman of the Development Studies Department at Dhaka University, Professor Mahbubullah said Bangladesh’s persistent economic fragility cannot be overcome without establishing a genuine balance of power within society and dismantling a long-running ‘loot and plunder economy.’
The country has been stuck in a cycle of primitive accumulation since December 16, 1971, an economic structure he said continues to distort incentives, hinder productive growth, and sustain inequality, he said. He said that despite adopting numerous policies and reforms, Bangladesh has failed to achieve sustainable outcomes because ‘economic extraction and redistribution of wealth from one set of hands to another remain deeply embedded in the system.
“Unless we end this continuous reshuffling of wealth, real productive growth will remain elusive,” he cautioned.
Professor Mahbubullah underscored that meaningful economic reforms, including those relating to governance, investment, and market functioning, cannot take root unless the social and political power structure is rebalanced.