Bangladesh Bank Governor Mostakur Rahman has urged the government to place two proposed laws before the ongoing National Parliament session to address mounting defaulted loans and distressed assets in the banking sector. In a demi-official letter sent to Finance Minister Amir Khasru Mahmud Chowdhury on August 31, he requested action on the Distressed Asset Management Act, 2026 and amendments to the Money Loan Court Act, 2003.

The central bank has proposed five major changes to the Money Loan Court Act: creating an appellate tribunal with High Court status, setting reserve prices for auctioned assets, appointing separate recovery officers to enforce court orders, shortening legal timelines for case disposal, and increasing the deposit required for appeals. Bangladesh Bank said the measures could speed up loan-related cases and recovery of bank dues.

Under the proposed new law, licensed distressed asset management companies would buy troubled loans from banks and manage them through separate trusts. They could enforce collateral, restructure loans, convert debt into capital and, in some cases, take control of defaulting firms after 60 days’ notice. Bangladesh Bank said distressed assets reached about Tk11 lakh crore in 2025, roughly 60 percent of total bank lending.