BB offers 'special exit' to defaulters to cut NPLs, boost credit flow

In a major move, the Bangladesh Bank (BB) today announced a one-time "special exit" facility for loan defaulters, aimed at curbing the rising volume of non-performing loans (NPLs) and restoring banks' lending capacity. 

Under a BB circular issued today, banks may offer the facility to borrowers whose loans are classified as "bad" or "loss" as of June 30, 2026.

Eligible borrowers must repay their entire outstanding loan in a single instalment, and the BB has allowed banks, including state-owned commercial banks, to waive interest on those loans. 

The facility also covers loans classified as "bad" or "loss" that were rescheduled between August 6, 2024, and June 30, 2026. It will remain in effect until December 31, 2026. 

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85% of default loans concentrated in just 15 banks

The move comes as banks' NPL ratio climbed to 32.26 percent of total outstanding loans at the end of March, up from 30.6 percent at the end of December, according to BB data. Total classified loans rose by Tk 31,487 crore over the quarter, to Tk 588,704 crore from Tk 557,217 crore in December.

The central bank said the exit facility would reduce banks' NPLs while improving their capacity to disburse new loans, which it said would support production, investment and employment generation.

It has asked banks to prioritise short-term agricultural credit and loans to the Cottage, Micro, Small and Medium Enterprise (CMSME) sector under the scheme.