The government has asked the state-owned commercial banks (SoCBs) to lower non-performing loans (NPLs) at any cost, officials said.
The directive was given at a meeting at the secretariat on Wednesday with financial institutions division (FID) secretary Ashadul Islam in the chair.
Sources said the issues of the volume of classified loans and provisioning were discussed with due importance.
The chief executives of the SoCBs were told to lower the volume of classified loans taking necessary measures.
As of September, the amount of defaulted bank loans reached an all-time high of nearly Tk 1.0 trillion, much to the worry of experts and bankers, according to data available with the Bangladesh Bank.
In the first nine months of this calendar year, NPLs jumped by nearly 34 per cent or Tk 250.67 billion to Tk 993.70 billion from Tk 743.03 billion last December.
The size will be even bigger if the amount of rescheduled and written-off loans is taken into account.
During the same period, the overall shortfall in provisioning against the NPLs swelled by over 20 per cent or Tk 13.60 billion.
The total amount of provisioning shortfall rose to Tk 81.27 billion in September from Tk 67.67 billion in January, showed the latest central bank data.
After the meeting, a senior FID official said the banks were asked to create a realistic plan for the next year to reduce the volume of classified loans as much as possible.
The bankers at the meeting pinpointed some problems that stand in the way of recovering loans, he told the media.
Among the issues they highlighted were writ petitions filed by borrowers and inadequacy of courts to handle relevant cases, the official said.
Quoting the bankers, he said a big volume of default loans remained stuck over writ petitions.
After the meeting, the FE contacted Sonali Bank managing director Obayed Ullah Al Masud over phone.
He said the FID would write to chief executives of the SoCBs seeking their suggestions for ways of recovering defaulted loans.
"I told the meeting that the size of loans in banking sector has reached Tk 8.5 trillion. Of the amount, nearly Tk 1.0 trillion has become classified," Mr Masud said.
A major portion of the Tk 1.0 trillion classified loans remained stuck in cases, he mentioned.
"The number of courts has to be increased to handle the cases quickly," the banker told the FE.
He said a separate bench in the High Court needed to be set up to handle writs filed by big borrowers.
Mr Masud further said that a cap had to be given on how many times a defaulter can file petitions.
"Whenever we declare big borrowers as defaulters, they file writ petitions in the higher court. As our counsellors vacate writs, they do so again."
"It continues year after year," he stated.
syful-islam@outlook.com