BB pushes for passage of two banking laws

Bangladesh Bank Governor Md Mostaqur Rahman has urged the government to take necessary steps to place the proposed amendments to the Money Loan Court Act, 2003, and the proposed Distressed Asset Management Act, 2026, before the ongoing session of parliament.

The central bank governor issued a demi-official (DO) letter to Finance Minister Amir Khosru Mahmud Chowdhury in this regard on August 31.

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Mohammad Shahriar Siddiqui, assistant spokesperson of Bangladesh Bank, confirmed the matter to The Daily Star.

In the letter, the governor said high levels of non-performing loans and distressed assets in the banking sector are hindering overall financial stability and economic activities.

He said Bangladesh Bank has already sent drafts of the two laws to the Financial Institutions Division of the finance ministry for necessary action.

The proposed amendments to the Money Loan Court Act are aimed at making the recovery of defaulted loans more effective, dynamic and time-befitting, while the new Distressed Asset Management Act will provide a legal framework for the management, restructuring and resolution of distressed assets held by banks and financial institutions, it added.

The governor said the laws would help accelerate loan recovery, improve the quality of banks' and financial institutions' balance sheets, and strengthen governance in the banking sector.

He also said Bangladesh Bank would continue to provide any necessary support in this regard.

The governor urged the ministry to take necessary measures to place the two legislative proposals before parliament in the ongoing session in the interest of financial stability and revitalising overall economic activities.

In the proposed amendments to the Money Loan Court Act, the BB governor suggested establishing an appellate tribunal with powers equivalent to those of the high court; fixing a reserve price for auctions conducted under the law; appointing a recovery officer for execution proceedings in loan recovery cases; reducing the existing time limits prescribed under various sections of the Act to expedite the disposal of cases; and increasing the mandatory deposit amount required for filing an appeal.