The Bangladesh Association of Banks (BAB) leaders have called on the central bank to take decisive action to prevent loan defaulters from filing writ petitions in court, which they argue is slowing down efforts to recover non-performing loans (NPLs).

The request was made during a meeting between BAB representatives and Bangladesh Bank Governor Ahsan H Mansur on Wednesday, as reported by the central bank’s spokesperson, Husne Ara Shikha.

Led by BAB Chairman Abdul Hai Sarker, who also chairs Dhaka Bank, the delegation urged Bangladesh Bank to introduce measures to stop borrowers from using legal loopholes to delay loan recovery processes.

Under current regulations, banks have the right to pursue legal action for repayment when a borrower defaults and their loan is classified as non-performing. However, both borrowers and lenders can challenge the rulings of special courts, known as Artha Rin Adalat, by filing writ petitions with the High Court.

Many borrowers exploit this provision, filing writ petitions to secure stay orders that temporarily halt recovery proceedings. This legal tactic significantly delays banks’ efforts to reclaim funds, leaving large amounts of NPLs unresolved.

The BAB leaders emphasized that these delays were hurting the financial sector and pressed the central bank to take action to mitigate this issue.

In response to the BAB’s demands, Governor Mansur assured the delegation that the Bangladesh Bank would explore all possible avenues to resolve the matter. He acknowledged the challenges posed by writ petitions. He indicated that the central bank may consult the Attorney General’s Office to devise a strategy to streamline legal procedures and accelerate the recovery of bad loans.