The central bank’s policy decisions have been blamed for driving up the volume of default loans

Mohammad Hatem, president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), has accused the government and Bangladesh Bank of adopting policies that are driving up default loans.

In an interview with Bangladesh Pratidin on Wednesday, he said that instead of extending essential support to struggling businesses, key facilities are being withdrawn — a move that is inevitably pushing more loans into default.

Hatem noted that while Bangladesh Bank previously offered special support measures for defaulters, these were limited to only a handful of institutions. Over time, those facilities were either scrapped or left to the discretion of individual banks, which are now largely unwilling to reschedule loans. “Under such circumstances, how are businesses expected to survive?” he asked.

He further said that when companies are unable to keep their operations running, loan repayment becomes unmanageable. According to Hatem, many banks are currently charging interest rates of 15–16%. Although borrowers regularly pay installments, he claimed the principal often remains untouched, with banks collecting only the interest.

Warning that the situation could worsen, Hatem said default loans will continue to rise unless policies change — and he placed the primary responsibility on Bangladesh Bank’s current approach.