DCCI urges Bangladesh Bank to extend loan default period to six months

It calls for revised rescheduling facilities for “unintentional” loan defaulters and subsidised credit for export-oriented sectors

The Dhaka Chamber of Commerce and Industry (DCCI) has called on the central bank to double the grace period for loan classification, requesting that a loan be marked as defaulted only after six months of non-payment instead of the current three.

A DCCI delegation, led by President Taskeen Ahmed, placed the demand during a meeting with Bangladesh Bank Governor Mostaqur Rahman at the bank’s headquarters on Monday afternoon.

The business leaders highlighted that the private sector is grappling with a 22-year low in credit growth, which plummeted to 6.03 percent.

With the policy rate at 10 percent, bank interest rates have soared to 16–17 percent, making institutional financing increasingly unviable for many enterprises.

"The policy of reducing the loan classification period from nine months to three months, combined with high operating costs and the energy crisis, is putting immense pressure on businesses," Taskeen said.

He urged the regulator to reconsider rescheduling facilities for "unintentional" defaulters and to provide targeted subsidised credit for SMEs and export-oriented industries.

The DCCI chief also pointed out that the gap between lending and deposit rates has exceeded 5 percent, a trend he claims has eroded the confidence of local investors in the banking sector.

Mostaqur acknowledged the structural weaknesses of the economy, noting its heavy reliance on a limited range of products and export markets.

He emphasised that expanding domestic economic activity is the only way forward.

"We must prioritise the CSME (Cottage, Small, Medium Enterprises) sector and agricultural management to stimulate the local economy and create jobs."

Addressing the persistent inflation, the governor attributed high prices partly to the rising costs of logistics and product management.

He admitted that disappointing GDP growth in recent years has hindered both foreign and local investment, adding that "there is no alternative to reforming business policies and reducing the cost of doing business" to overcome the stagnation.