Business community is exposed to a deep crisis as Bangladesh Bank has planned to reduce overdue loans classification time following the conditions of International Monetary Fund (IMF).

Bankers also fear an unprecedented rise in non-performing loans on ledger book if central bank considers three overdue for credit classifications instead of six month installments.

Business leaders mentioned that such steps may create challenges while the entrepreneurs are under pressure to adjust import bills against increasing rates of US dollar.

Prior to Covid-19 pandemic, businesses opened Letter of Credits (LCs) at Tk 85 per unit of US dollar which is now Tk 108. Besides, there is an external pressure of inflation triggered by Russia- Ukraine warfare.

Bangladesh Bank is taking the measure as part of IMF conditions followed by $ 4.7 billion loan to pacify foreign exchange reserve.

Dhaka Chamber of Commerce and Industry (DCCI) President Sameer Sattar said the policy may cast a negative impact on private sector investment.

“The businesses are struggling to revive growth after corona pandemic. In this situation, such policy will hamper the momentum. Besides, the policy will increase NPL in large amount,” he said.

Association of Bankers Bangladesh (ABB) former Chairman Syed Mahbubur Rahman thinks the policy may create a new challenge to managing ledger of NPL.

“Most of the industries are running with term loan. In mid of the year, such policy of halving timeline to classify bad loan is unexpected to all,” Rahman, also managing director at Mutual Trust Bank, said.

The non-performing loan in banking sector soared to Tk 1.35 trillion by end of FY 2022-23.