BB’s One-Time Exit Must Lead to Real Recovery

Bangladesh Bank’s (BB) One-Time Exit (OTE) facility comes at a critical moment for the country’s banking sector. The scheme allows eligible borrowers to settle their principal in a single payment, while banks may waive accumulated interest. The central bank hopes this will bring long-stuck money back into the system. The need is urgent. According to BB data, classified loans reached Tk 5,88,704 crore by March 2026, up Tk 31,487 crore from Tk 5,57,217 crore three months earlier. They accounted for 32.26 per cent of total outstanding loans of Tk 18,24,668 crore.

Bankers, however, fear that many large borrowers may struggle to arrange hundreds or even thousands of crores before the December 31 deadline. Their concern is understandable, particularly as nearly 94 per cent of classified loans were in the bad/loss category. These loans can qualify for the OTE facility, along with certain previously rescheduled bad loans. The scale of the problem is enormous. The scheme could potentially unlock substantial funds. Nevertheless, its success will depend on whether borrowers can mobilise the principal within the stipulated period.

The policy offers meaningful relief, but its structure presents a major challenge. Banks can waive applied and unapplied interest with board approval, but borrowers must still pay the entire principal at once. A small business may manage this by collecting receivables, selling inventory or arranging fresh funds. A large company owing hundreds of crores faces a far greater hurdle. Even a substantial interest waiver cannot resolve a liquidity crisis when the principal itself is enormous. Thus, the facility may prove less accessible to borrowers with the largest liabilities. Meanwhile, forcing them to raise huge sums quickly could create additional financial pressure.

This could have serious economic consequences. A borrower may be forced to sell land, machinery or even a factory to raise the required cash. The bank would recover money, but the business could lose the productive assets needed to sustain operations. Jobs could disappear, output could decline and future repayment capacity could weaken. BB should, therefore, make business viability a central consideration. Banks should examine cash flow, business prospects, repayment history, assets and the reasons for default before approving any waiver. Wilful defaulters and those who diverted funds should face strict treatment. Genuine but viable businesses, however, should receive a realistic opportunity to settle their liabilities.

What we expect, therefore, is genuine recovery rather than a cosmetic improvement in banking figures. The OTE facility should help banks recover money without unnecessarily destroying productive enterprises. It must not become another escape route for habitual defaulters. BB should closely monitor implementation, ensure transparent decisions and publish clear recovery results.

More importantly, banks must exercise their discretion responsibly. The success of the OTE should be judged by how much money is actually recovered and whether repayment discipline improves. Only then can the facility become a meaningful step towards restoring stability, accountability and confidence in our banking sector.