Financial Institutions Division (FID) under the Ministry of Finance has formed a three-member team to recommend how to reduce the volume of classified loans in the country's banking system.
The members of team met with the senior officials of Bangladesh Bank (BB) on Tuesday just a day after forming the high-powered body, officials said.
On Monday, the FID assigned its joint secretary Md. Rizwanul Huda as chief of the team, they added.
At the meeting, officials from both the central bank of Bangladesh and the FID discussed about amendment of three acts -- Banking Companies, Bankruptcy and Artha Rin Adalats (Money Loan Courts) for settling the cases within the shortest possible time-frame.
The meeting also discussed how to expedite Alternative Dispute Resolution (ADR) system to help settle of loan disputes, they added.
"We're working to prepare a recommendation to lessen the amount of non-performing loans (NPLs) in the banking system without hampering the country's overall business activities," a senior official told the FE after the meeting.
Deputy Governor of the BB Ahmed Jamal led the central bank officials at the meeting.
The team is scheduled to meet top executives of four leading state-owned commercial banks (SoCBs) on the same ground, according to the FID officials.
"We may also meet with senior chief executive officers (CEOs) of some private commercial banks (PCBs) to discuss the same issues," a senior member of the team told the FE.
He also said the team will meet the top executives of Agrani Bank Limited today (Wednesday) as per scheduled. "We'll also meet with senior executives of Rupali Bank Limited tomorrow (Thursday)."
The team is scheduled to meet the top executives of other two SoCBs in the next week, the FID official added.
The team has been formed in line with the decisions that were taken at a meeting held at the ministry on January 10 with newly appointed Finance Minister AHM Mustafa Kamal in the chair.
After the meeting, the minister reportedly said the government will amend the banking companies act to recover the default loans.
As per the meeting decisions, another committee will also be formed to recover the written-off loans. The working group will examine why the loans are not being realised.
The committee is yet to be formed, according to the FID officials.
The new finance ministry's moves came against the backdrop of rising volume of the default loans in the country's banking system in the recent months.
The volume of NPLs jumped by nearly 34 per cent or Tk 250.67 billion to Tk 993.70 billion as on September 30, from Tk 743.03 billion as on December 31, 2017, according to the BB data.
The share of classified loans also rose to 11.45 per cent of the total outstanding loans during the period under review from 9.31 per cent nine months ago.
The default loans include substandard, doubtful and bad/loss of total outstanding credits, which stood at Tk 8,680.07 billion as on September 30, 2018, from Tk 7,981.96 billion as on December 31, 2017.
