BB pushes for passage of two banking laws

Bangladesh Bank Governor Md Mostaqur Rahman has urged the government to take 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 made the request in a demi-official (DO) letter to Finance Minister Amir Khosru Mahmud Chowdhury 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 financial stability and economic activity.

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

The proposed amendments to the Money Loan Court Act aim to make the recovery of defaulted loans more effective, dynamic and time-bound. The new Distressed Asset Management Act will provide a legal framework for managing, restructuring and resolving distressed assets held by banks and financial institutions, according to the letter.

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 assured the ministry that Bangladesh Bank would provide any necessary support in this regard.

The governor urged the ministry to take the necessary measures to place the two legislative proposals before parliament during the ongoing session, saying they are needed to ensure financial stability and revitalise economic activity.

Under the proposed amendments to the Money Loan Court Act, the governor suggested establishing an appellate tribunal with powers equivalent to those of the High Court; fixing reserve prices for auctions conducted under the law; appointing recovery officers to oversee execution proceedings in loan recovery cases; reducing the time limits prescribed under various sections of the Act to expedite case disposal; and increasing the mandatory deposit required to file an appeal.