Bangladesh Bank Governor Md. Mostakur Rahman has announced an 18-month special action plan to rein in rising defaulted loans, which now account for nearly 36 percent of the country’s total outstanding bank credit.

Speaking as the chief guest at a seminar on Bangla QR codes at the University of Dhaka on Thursday, the governor described the high level of non-performing loans as a major threat to the country’s financial sector.

He said the central bank’s roadmap aims to reduce defaulted loans and restore stability to the banking sector. According to the plan, borrowers will be offered an exit opportunity through a bullet payment mechanism during the first six months. Over the following year, authorities will implement the Distressed Asset Management Act and the Money Loan Court Act to strengthen loan recovery efforts.

The governor expressed hope that both laws would be passed during the next session of Parliament.

Rahman also alleged that irregularities under the previous government had affected nearly 20 million depositors, making strict corrective measures essential to restore confidence in the banking system.

To support private sector credit growth, he announced that Bangladesh Bank will introduce a new Tk 60,000 crore lending package from September.

In addition, he said initiatives will be taken to create 5,000 new entrepreneurs in every upazila across the country to support the rehabilitation and employment of participants in the July movement.