BANGLADESH: Regulatory Crackdowns against Loan Apps

Bangladesh Bank (BB) is taking a distinctive approach by focusing on the origination side of lending – scrutinizing large corporate loans before approval to prevent defaults before they happen .

Key Actions Taken

Pre-Approval Verification

Bangladesh Bank plans to scrutinize large corporate loans before they are approved by commercial banks. Governor Mostaqur Rahman has proposed this as a mechanism to reduce default loans .

Cashless Transition Push

The Governor emphasized the imperative for a rapid transition toward a cashless economy, identifying the "Bangla QR" payment system as the primary instrument to bolster national revenue and ensure financial transparency .

Implementation Status

The proposal remains at a preliminary stage. No steps have yet been taken to determine procedures or recruit personnel for evaluating loan proposals. However, the central bank spokesperson noted that the matter was disclosed early to make banks more cautious. A policy will be announced once finalized .