Governor of Bangladesh Bank Md Mostakur Rahman remarked that nearly one-third of the total money in bank loans has practically been stolen due to long-standing irregularities, corruption, and loan fraud in the country's banking sector.
He stated that a major portion of what is currently designated as defaulted loans has, in reality, been embezzled. As a result, nearly 20 million depositors have been directly affected, and public trust in the banking sector has been severely undermined.
He made these remarks as the chief guest on Thursday (August 6) at a discussion on "Bangla QR," organized by Dutch-Bangla Bank at Dhaka University.
The governor said that due to prolonged weak supervision, irregularities, and political influence, the country's banking sector has fallen into a deep crisis.
“What we are calling defaulted loans is actually stolen money."
He mentioned that currently around 36% of total loans in the banking sector are defaulted. For a healthy and stable banking system, this rate is extremely alarming.
Such a high level of non-performing loans has not only weakened the financial capacity of banks but has also posed a major risk to the entire economy.
Mostakur Rahman said that because huge sums of money were embezzled from banks in the past, around 20 million depositors in the country are facing various uncertainties and suffering. Therefore, protecting the interests of depositors and restoring trust in the banking sector is now one of Bangladesh Bank's top priorities.
The governor announced that Bangladesh Bank has adopted a special 18-month action plan to recover the banking sector.
He stated that during the first six months, borrowers will be given an opportunity to exit the system by settling their loans through a "bullet payment," subject to specific conditions.
Over the following year, a new legal framework will be introduced to streamline the recovery of defaulted loans and manage distressed assets effectively.
To this end, work is underway to draft the Distressed Asset Management Act and the Money Loan Court Act.
He hoped that both laws might be passed in the upcoming parliamentary session.
The governor also shared plans to launch a new loan package worth Tk60,000 crore starting in September to boost private sector investment and credit flow.
Mostakur Rahman further stated that Bangladesh Bank has undertaken a special program to generate youth employment and develop entrepreneurs.
He mentioned that 10 youths under the age of 28 will be selected from each upazila across the country, creating a total of 5,000 new entrepreneurs nationwide.
The selected youths will be provided with training, mentorship, and necessary financial support so that they can launch new ventures and generate employment.
The governor noted that to place the country's economy on a sustainable foundation, banking sector reforms alone are not enough; simultaneously, creating new entrepreneurs, boosting productive investments, and ensuring transparent financial management must be guaranteed.