The Bangladesh Bank has formed a five-member committee to provide necessary policy support for restructuring corporate borrowers that have defaulted on loans due to factors beyond their control.

In essence, the high-level committee aims to facilitate the recovery of non-performing bank loans from distressed businesses by helping them become viable, and therefore able to make repayments.

Mezbah Ul Haque, executive director of the central bank, will lead the committee, while Delwar Hossain, joint secretary of the Financial Institutions Division, will serve as its convener.

Abdul Haque, a former director of the Federation of Bangladesh Chambers of Commerce and Industry, will represent the private sector, and Mohammad Shahriar Siddiqui, a director of the Bangladesh Bank, will act as the member secretary.

Other members include Mamun Rashid, an economic analyst, and Delwar Hossain, joint secretary of the Financial Institutions Division.

The committee will assess whether corporate borrowers that are struggling to repay their loans were genuinely affected by factors beyond their control and determine whether any restructuring or policy support could help revive their businesses. It will also specifically examine companies with defaulted loans of at least Tk 50 crore.

Meanwhile, central bank officials informed that no specific timeframe was set for completing the task.

They said this move is one of many initiatives aimed at sustaining the economy and strengthening the banking sector amid challenges posed by factors such as Covid-19, the Russia-Ukraine war, global economic slowdown, political instability, and natural disasters like flooding.

As of September 2024, total outstanding loans in the banking sector stood at about Tk 16.83 lakh crore, of which some Tk 2.85 lakh crore, or 17 percent, had defaulted, according to central bank data.

However, various industry people claim the actual volume of defaulted loans exceeds Tk 4 lakh crore if rescheduled and written-off loans are taken into account.