Owe a thousand crore, get fifteen more years to repay…or not
Try this at your local bank branch. Tell the manager you haven’t paid an instalment in two years and ask for fifteen more. Ask that for the first two of those years you pay nothing at all. Then ask that the whole arrangement be kept off the books so the bank looks healthier than it is.
You’d be laughed out of the building. Unless you owe a thousand crore taka. Then you get a circular.
On August 31, Bangladesh Bank told the country’s banks that borrowers with outstanding loans of 1,000 crore taka or more may now stretch repayment across fifteen years, including a two-year grace period. Last year the ceiling was ten. The restructuring add-on, previously two years, is now four.
The application deadline, which was supposed to be June 30, has become September 30. And borrowers who already took last year’s package (most of whom, by the regulator’s own admission, haven’t exited their grace periods yet) are welcome to apply again.
People who haven’t yet been asked to pay a single instalment under the previous rescue are being handed a larger one, in advance. The central bank’s spokesman, Shahriar Siddiqui, told The Business Standard newspaper that these borrowers might come under stress in future, so the terms were made “somewhat more relaxed” just in case.
Forgiveness before the bill has arrived.
The numbers do not lie. The circulars do
Non-performing loans crossed 6 lakh crore taka in June 2026, which works out to 32.79% of everything the banks have lent. Roughly one taka in every three. The pile grew by nearly 18,000 crore taka in a single quarter, with the rescheduling bonanza in full swing (partly because of it, I’d argue).
Only Ukraine, a country under active invasion, carries a worse ratio. Bangladesh is not at war. Its banking system behaves as though it lost one.
The ratio did dip once, to 30.60% in December 2025. Not because anybody paid up. Roughly 300 borrowers rescheduled close to 1 lakh crore taka under the September 2025 scheme, and a rescheduled loan disappears from the bad-loan column the moment the paperwork clears.
By March 2026 the number was climbing again. Ninety days, and the magic had worn off.
This is the accounting trick at the heart of the whole enterprise, performed every quarter with the solemnity of a sacrament. A defaulted loan is a wound. Rescheduling doesn’t stitch it. It lays a bandage over a haemorrhage so the patient can be photographed looking well.
Bangladesh Bank data cited by the Times of Bangladesh newspaper put restructured loans at 4,46,894 crore taka at the end of 2025, and around 40% of that has already slid back into the classified category.
Four in ten “rescued” loans are bad again. Bankers who have sat in meetings with the governor say he has complained that most borrowers who took last year’s committee package went on to default a second time.
The regulator knows the medicine doesn’t work. Its response was to triple the dose.
Eleven years of the same circular
None of this started on August 31.
The lineage goes back to 2015, when borrowers owing more than 500 crore taka were handed a one-time restructuring. In 2019 defaulters could regularise with a 2% down payment and a decade to pay. In 2022 the rules were loosened again, to four reschedulings, with repayment in some cases stretching towards three decades.
After the 2024 uprising the interim administration cut the settlement down payment from 10 percent to 5. September 2025 brought ten years, a two-year grace period and 2 percent down. In June 2026 the four-month-old BNP government added a “special exit” that lets banks waive the interest entirely for a lump-sum settlement. And now, fifteen years.
Awami League, a technocratic interim administration, and now the Bangladesh Nationalist Party. Three governments with very different ideas about the country, and yet the circulars coming out of Motijheel read as if written by the same hand. Whoever holds power, it seems, the thousand-crore club holds the pen.
This is not a fringe view. Economics professor Dr Selim Raihan of Dhaka University told The Daily Star newspaper that the new leniency “risks weakening repayment discipline and encouraging loan default.”
Muhammad A. Rumee Ali, a former deputy governor of the central bank, was blunter in The Business Standard newspaper: “If you reward defaulters, more people will want to become defaulters.” Zahid Hussain, formerly the World Bank’s lead economist in Dhaka, put it most precisely.
The rescheduling culture, he said, tells borrowers that “you have a way out to skip the fundamentals of the contract.” What the country needs, in his view, is the reverse.
The courts: where debt goes to retire
Perhaps the defaulter isn’t afraid of the bank because he has never had reason to fear the court.
As of May 2026, some 74,679 recovery suits involving nearly 4 lakh crore taka were pending in the country’s 68 money loan courts. Dhaka’s four courts alone are sitting on 41,814 cases, roughly 10,500 per judge.
One of them received 1,108 new cases in 2025 and managed to dispose of 96. Janata Bank sued in 2004 to recover 18 crore taka from a tannery. Twenty-two years and 104 hearing dates later, not a single taka has come back.
And when cases do conclude, banks recover about a fifth of what they were owed. The rest is gone.
The smarter defaulters don’t bother waiting for a verdict. They file a writ, the High Court issues a stay, and everything stops. Loans frozen under stay orders ballooned from 21,226 crore taka at the end of 2022 to 182,419 crore taka at the end of 2025, an eightfold jump in three years.
Elsewhere a stay order is just delayed. Here it has become a business model.
The one set of reforms that might change this, a Distressed Asset Management Act and a toughened Money Loan Court Act, is still waiting on Cabinet approval. The governor wrote to the finance minister pleading for both on the day the fifteen-year circular went out.
Who pays? Everyone who did nothing wrong
Money locked up for fifteen years in an oligarch’s rescheduling is money unavailable to anyone else. That is how a balance sheet works.
Private-sector credit growth collapsed to 4.47% in June, the lowest on record. Lending to cottage, micro, small and medium enterprises, the part of the economy that employs people, shrank 5.15% in the first quarter alone.
Small business now gets under 16% of bank lending against a central bank target of 25.5%. Some private banks were charging as much as 15% on loans until the regulator was forced, in July, to cap the spread between deposit and lending rates at 4%.
Think about what that looks like from a garment sub-contractor’s stool in Narayanganj. She pays fifteen percent, if she can get a loan at all, because a third of her bank’s book is rotting and the living must be squeezed to carry the dead.
The conglomerate down the road that owes 1,200 crore taka and hasn’t paid a thing since 2024 now has until 2041. The state is laying on a 60,000 crore taka refinancing pot at 7% for “ailing industries” while her rate sits north of ten.
There used to be one small consolation for people who paid on time. Banks were required to rebate at least 10%of interest to good borrowers. That was scrapped after 2020. So in the same decade that it multiplied the rewards for default, Bangladesh removed the last reward for repayment.
Depositors carry whatever is left. Every rescheduled loan a bank gets to pretend is healthy means a saver kept in the dark about the true state of the institution holding her money.
One senior banker admitted to The Business Standard newspaper that even the strongest banks have started cutting exposure to certain peers, doubting they can meet their obligations. Bankers no longer trust bankers. Why on earth should you?
The neighbours did the hard thing
Pakistan’s bad-loan ratio is around 7.4%. Sri Lanka, which defaulted on its sovereign debt in 2022, has clawed its own down to roughly 12.6%. India was running an 11.5% ratio as recently as 2018, then did what Bangladesh refuses to do: it built a bankruptcy code with teeth, forced its banks to recognise losses, and let promoters lose the companies they had run into the ground.
India’s ratio now sits near two percent. Bangladesh sits at nearly 33, roughly fifteen times worse than a neighbour that once had the same disease.
The central bank describes all this as part of an eighteen-month roadmap to bring down non-performing loans. The ratio dipped once, on paper, and has climbed every quarter since. Whatever that is, it isn’t a roadmap. It looks more like a getaway route, with the regulator holding the door.
The central bank looked at a 40% relapse rate, a court system that recovers twenty paise on the taka, and a small-business sector losing credit quarter after quarter, and concluded that the people who owe the most were the ones who needed more time. Not the shopkeeper, or not the exporter who pays on the day. The members of the thousand-crore club.
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Zulkernain Saer is an investigative journalist