Bangladesh Bank (BB) has decided to take some steps including loan restrictions, freeing from political influence and mergers to improve the conditions of the country’s troubled banks.

In this regard, the banks whose condition is absolutely weak may face various restrictions on loan distributions and collection of deposits, said Bangladesh Bank Governor Abdur Rouf Talukder.

After the meeting, Bangladesh Bank Executive Director and Spokesperson  Mezbaul Haque confirmed the decisions to the reporters, reports Daily Sun.

Association of Bankers Bangladesh (ABB) Chairman and Managing Director of BRAC Bank Selim RF Hussain, among others, was present at the meeting with the central bank governor.

Mezbaul Haque said Bangladesh Bank instructed the executives of all banks to take all kinds of steps to catch the defaulters.

It also advised them to hire experienced lawyers to recover the money stuck in the default cases.

“We announced the PCA for bank reforms last December. Clear instructions have been given on how banks' positions will be determined in terms of reforms,” he said.

Mezbaul Haque said, “Taking action against the banks will start by March next year based on the December quarter of this year. If banks can improve their financial condition quickly, there will be no action against them."

“Banks whose condition is absolutely weak may face various restrictions on loan distribution, deposit collection,” he added.

“Again, some banks can be merged. However, if the banks can improve their financial condition during this period, no action will be taken against any bank,” the spokesperson said.

He added, "We have recently announced a contractionary monetary policy. We have stated that this type of monetary policy will continue until our target inflation is achieved.”

ABB Chairman Selim RF Hussain said that the banking will be conducted according to the framework given by Bangladesh Bank.

He said, “No political identity will be considered to catch defaulters. Besides, the governor has ordered all necessary steps to restore good governance in the bank.”

The steps taken by Bangladesh Bank have already started working, he added.

bd-pratidin/GR