The government and Bangladesh Bank have jointly initiated an 18-month plan to reduce non-performing loans (NPLs) and restore discipline to the financial sector.
The strategy focuses on accelerating bad debt recovery, introducing new loan repayment mechanisms, and implementing structural banking reforms.
Details of the comprehensive plan will be published soon.
The announcement was made by Bangladesh Bank deputy governor Habibur Rahman on Wednesday (September 30) during the quarterly Monetary Policy Statement release.
Rahman noted that key policy tools—such as "bullet payment" structures and "one-time exit" facilities—have been introduced to expedite NPL recovery.
Although implementation has experienced initial delays, the central bank expects visible positive outcomes within the next 18 months.
Alongside bad debt management, the central bank is prioritizing support for productive economic sectors to keep them active.
Addressing global trends, the deputy governor highlighted that while many central banks worldwide are lowering interest rates, Bangladesh Bank maintains a tight stance with its key policy rate (currently at 9.50% after a recent adjustment) to curb inflation.
He emphasized that controlling inflation requires more than monetary policy adjustments: "In addition to managing credit and liquidity, it is essential to improve supply chains, build infrastructure capacity, and ensure market stability."
Achieving a sustainable balance between production costs and inflation, he added, demands coordinated policy efforts across the board.