With around 70 per cent of loans going default, the state-run Janata Bank has now been asked to take a borrower-wise, time-bound resolution plan for every large account to recover the funds.
The directive was given recently at a meeting between officials of the Financial Institutions Division (FID) and the board of directors and top management of the bank at the Bangladesh Secretariat, officials said.
The FID is holding meetings with the authorities of the state-run banks to review their overall financial and operational situation, recent progress, existing problems and prospects, and ongoing banking sector reforms.
The meeting, chaired by FID Secretary Nazma Mobarek, also asked the bank authorities to evaluate borrowers' viability, cash flow, collateral, group exposure, legal status, and potential settlement options individually, sources said.
"Nearly 70 per cent of the bank's total loans are classified. What is even more alarming is that a large portion of these non-performing loans (NPLs) is concentrated among a small number of large borrowers," she told the meeting.
"Consequently, this is not merely an NPL problem. It is simultaneously a credit concentration and governance problem," she noted.
She instructed to tie up recovery performance directly to management accountability.
The meeting also asked the bank management not to concentrate on a particular sector and a large group. "In future lending, over-reliance on large corporate groups must end."
The bank was asked to go for portfolio diversification and strictly consider group exposure, beneficial ownership, borrower cash flow, repayment capacity, sector concentration, and post-disbursement monitoring before disbursing loans.
Also, it was asked to expand quality lending to CMSMEs, agriculture, women entrepreneurs, and other productive sectors.
However, FID officials cautioned the bank authorities not to compromise asset quality while expanding credit.
Sources said the meeting also discussed that a large portion of the bank's loans remained tied up in litigation. "Merely filing lawsuits should not be considered a recovery action. The status, decrees, execution stages, collateral positions, and recovery probabilities of major lawsuits must be reviewed regularly."
The FID secretary asked the bank authorities to intensify efforts to recover assets siphoned abroad in coordination with BFIU and the relevant authorities.
"Janata Bank's capital position is extremely weak," said Mobarek.
She asked the management to take a credible medium-term capital restoration plan essentially, which can help simultaneously in addressing NPL recovery, profitability restoration, provisioning improvements, risk-weighted asset management, balance-sheet restructuring, and operational efficiency.
"If government capital support is required, it should be linked to measurable reforms and performance commitments," she added.
As of December 2025, Janata's financial health deteriorated sharply as its stock of NPLs surged to Tk 725.39 billion, exposing the state-owned lender to an unprecedented balance sheet crunch.
The mounting volume of unrecovered loans pushed the bank's actual capital shortfall to a record Tk 644.06 billion, while its provisioning deficit - the mandatory reserves required against classified loans - widened to Tk 559.32 billion, according to official financial data.
The bank also posted a staggering net loss of Tk 39.31 billion for 2025.
Its core banking operations remained under severe stress, with net interest income staying deeply in the red as interest operations alone incurred a loss of Tk 59.03 billion.
Contacted Monday, Janata Bank Managing Director Mazibur Rahman said he had been putting strong pressure on officials concerned to recover bad loans.
He said the bank management had formed task forces at divisional levels to recover loans.
The meetings of the task forces were taking place where customers were invited and persuaded to give back the bank's money, he said.
Rahman said the FID had asked them to open new bank accounts and move towards creating new businesses. "We are moving in line with the directives."
Replying to a query, he said the bank was no longer collecting deposits at higher interest rates.
