Published: 01:17 AM, 19 June 2026
Banking System in Stupendous Disarray As Losses Hit BDT 1 Lakh 37 Thousand Crore
The banking sector in Bangladesh is suffering from the worst ever crisis since the country's independence 54 years ago. Defaulted loans have shot through the roof while rising sums of rescheduled loans and written off credits keep on aggravating the country's banking system without respite. Such continuous losses and damages pose grim threats to banks and financial institutions both. Profit margins in nearly all banks have plummeted down steeply plunging banks into severe liquidity crisis and capital deficit.
Bangladesh Bank's Financial Stability Report 2025 shows that the country's banking sector has been inflicted with neat losses amounting to BDT 1 lakh 36 thousand 666 crore whereas banks obtained profits of 12 thousand 158 crore taka during 2024. Economists and financial experts have stated that the banking administration was hiding the true squalid scenario during the previous governments by means of regulatory lenience and some undue privileges but of late the ailing plight of most of the banks could no longer be concealed.
The operational costs in banks have acutely increased in recent times. Banks have to spend approximately 51 thousand 63 crore taka for staff salaries and administrative expenditures. The central bank has unveiled latest reports which signify that 10 (ten) banks have bogged down with losses summing up to BDT 1 lakh 54 thousand 745 crore. In particular most of the Shariah-based banks have come under the jackboot of financial losses most perilously which are First Security Islami Bank, Social Islami Bank, Exim Bank, Global Islami Bank and Union Bank. First Security Islami Bank has gone through losses of BDT 66 thousand 386 crore taka while Exim Bank has been hit hard with losses rising to 28 thousand 909 crore taka. These two banks top the list of losing concerns when it comes to Shariah-based banks.
AB Bank, IFIC Bank, National Bank, Premier Bank and Padma Bank have also suffered enormous losses. Financial scholars have marked distressed loans as the main reason behind mounting losses in the banking sector. Bangladesh Bank states that at the end of 2025, the extent of bad loans has escalated to 59 percent of the total distributed loans. Critically high written off debts and rescheduling loans over and over again have caused dire hazards in most of the banks.
Drawbacks caused by Islamic banking system have immersed a huge portion of the banking industry into woes and pangs. Cash crunch has hammered most of the banks for similar reasons. Several Shariah-based banks are not being able to disburse cash to their customers which has triggered panic and anger among depositors including Islami Bank Bangladesh PLC. Reports have surfaced that banks have rescheduled 1 lakh 70 thousand 503 crore taka for defaulters during 2025. Financial analysts have criticized regulators and unscrupulous bank directors for the formidable prevalence of misgovernance and total dissolution of rule of law in commercial banks. Bangladesh Bank and Financial Institutions Division (FID) have not been yet able to recover from nepotism and unwanted interferences allegedly.
Dr. Fahmida Khatun, Executive Director of Center for Policy Dialogue (CPD) has asserted that the banking administration in Bangladesh has been limping with financial predicaments due to lack of stern actions on mega defaulters. She stated that all governments speak out big pledges about banks and financial institutions but ground reality shows very poor implementation of these commitments. She called upon Finance Ministry and Bangladesh Bank to go tough on regulatory breaches which often occur among top bankers.
Professor Anu Muhammad, Jahangirnagar University said that Bangladesh's banks have gone into the clutches of branded culprits. He added that corruption in any sector remains a huge risk factor for the country's development initiatives if banks are controlled by vicious quarters.
Dr. Hossain Zillur Rahman said that the ruling authorities have frequently failed to carry out uncompromising drive against loan scammers for the most part. Partisanship and political intervention in recruitment of senior bankers and regulatory bosses pose persistent impediments to integrity and accountability in the banking system, he commented.
Professor Dr. Mainul Islam, Economics Department of Chittagong University said that transparency in the appointment of bank directors and the role of the central bank's observers are vital for establishing honesty and ethical exercise in the financial sector which includes banks too.
