BCBL Banks on BB Exit Policy To Fast-Track Recovery, Rebuild Balance Sheet

Bangladesh Commerce Bank Limited (BCBL), one of the country's most distressed private commercial banks, expects Bangladesh Bank's One-Time Exit Policy to unlock a major wave of loan recoveries, helping restore liquidity, strengthen capital and accelerate its turnaround after years of financial turmoil.

Speaking to The Daily Observer, BCBL Chairman Md Ataur Rahman said the central bank's special settlement scheme has already triggered an encouraging response from defaulting borrowers, with many approaching the bank to regularise or settle their outstanding loans.

"We are actively implementing the One-Time Exit Policy and the response from borrowers has been highly encouraging. Many clients have already come forward for settlement discussions and we expect a significant number to take advantage of the scheme. If that happens, loan recovery will increase substantially this year," Rahman said.

The remarks come as BCBL embarks on an ambitious restructuring programme aimed at reviving an institution battered by years of weak governance, mounting bad loans, severe liquidity shortages and erosion of capital.

"I did not inherit a healthy bank. I inherited an institution that had already suffered deep structural damage. Our first responsibility is to halt the deterioration, restore public confidence and gradually rebuild the bank," he said.

Rahman traced the bank's financial crisis to 2016, when S Alam Group gradually gained control of the bank through share acquisitions using shell companies.

"A substantial amount of funds was transferred to institutions linked to the group. Significant exposures also remain with Aviva Finance and leasing companies associated with S Alam Group and PK Halder. We have recovered part of our funds from Islami Bank Bangladesh PLC, but sizeable amounts remain tied up elsewhere. Recovering those assets will considerably strengthen our financial position," he said.

The bank's audited financial statements illustrate the scale of the challenge.

Although BCBL's authorised capital stands at Tk 1,000 crore, its paid-up capital is only Tk 198.87 crore, leaving it Tk 301.13 crore short of Bangladesh Bank's minimum regulatory requirement.

More alarmingly, years of accumulated losses have pushed the bank's capital fund into negative Tk 2,157.41 crore as of December 31, 2025.

"Rebuilding capital remains one of our greatest challenges," Rahman admitted.

The lender has also faced persistent liquidity pressure since 2018 and has relied heavily on Bangladesh Bank's support to sustain operations.

Outstanding borrowings from the central bank reached Tk 920.03 crore, including overdrafts, repo facilities, cash liquidity support and refinance schemes.

"Our immediate priority is to safeguard liquidity because depositor confidence depends on it. Once confidence returns, deposits will grow. Rebuilding that confidence is essential for the bank's recovery," he said.

Asset quality continues to weigh heavily on the bank's financial health.

BCBL's gross loan portfolio stands at around Tk 2,700 crore, of which Tk 1,660.75 crore are classified, resulting in a non-performing loan (NPL) ratio of approximately 56 per cent. The bank is also burdened by a provisioning shortfall of Tk 1,244.26 crore.

Rahman said Bangladesh Bank Governor has directed the bank to reduce its NPL ratio to around 20 per cent by December, describing the target as challenging but achievable through aggressive recovery efforts and the One-Time Exit Policy.

Loan recovery has already gathered momentum.

Recoveries rose from Tk 96 crore in 2024 to Tk 140 crore in 2025, while management has set an ambitious target of Tk 300 crore for 2026, largely supported by the implementation of the central bank's settlement programme.

"Recovery is the fastest route to repairing our balance sheet. Every taka recovered strengthens liquidity, improves capital adequacy and reduces financial stress," Rahman said.

Despite prolonged financial difficulties, the bank has maintained a stable deposit base, with deposits standing at Tk 4,803 crore as of June 2026.

Given its constrained capital position, BCBL is pursuing a cautious lending policy, focusing on quality rather than rapid expansion.

"We are not chasing aggressive credit growth. We are selectively financing SMEs and a limited number of import Letters of Credit. Our strategy is to ensure sound lending while preserving financial stability."

Alongside financial restructuring, the bank is undertaking governance reforms to improve operational efficiency and accountability.

Rahman said every branch has been assigned measurable performance targets covering deposit mobilisation, recovery of classified loans, business development and prevention of fresh defaults.

Legal action remains another key pillar of the recovery strategy.

According to the bank's audit report, BCBL has filed 2,051 loan recovery cases involving Tk 3,297.51 crore, with 1,245 cases still pending before the courts.

"The balance sheet cannot be repaired through accounting adjustments alone. Sustainable recovery requires legal enforcement, negotiated settlements and disciplined execution," he said.

The chairman said the bank's immediate priorities include mobilising deposits, recovering classified loans, restoring profitability, maintaining prudent credit growth and expanding import, export and remittance business.

He outlined a three-phase roadmap for the bank's revival: stabilising liquidity and depositor confidence, maximising recoveries through legal action and the One-Time Exit Policy, and rebuilding capital to return the bank to sustainable profitability.

"We inherited a bank burdened with negative capital, exceptionally high non-performing loans, weak asset quality and severe liquidity pressure. Our responsibility is to transform Bangladesh Commerce Bank into a stable, credible and financially resilient institution once again. The journey is from survival to stabilisation, from stabilisation to recovery, and ultimately to sustainable growth."