Bangladesh’s banking sector is facing an escalating crisis stemming from years of irregularities, weak oversight, and leniency toward influential borrowers, according to financial experts. Research reports, Bangladesh Bank data, and internal banking sources indicate that widespread loan mismanagement over the past decade has pushed several banks to the verge of insolvency.

Record Surge in Non-Performing Loans

Bangladesh Bank’s latest data show:

• Total loans disbursed as of September 2024:
  Tk 18 trillion

• Total non-performing loans (NPLs):
  Tk 6.44 trillion
  — representing 35.73% of all loans.

A year earlier, NPLs stood at Tk 2.85 trillion or 16.93%, meaning bad loans increased by more than Tk 3.6 trillion in one year.

According to the central bank’s quarterly data:

• NPL rate in June 2023: 12.2%

• NPL rate in March 2024: 24.6%

By June 2024, total loans and advances reached Tk 17.34 trillion, of which Tk 5.99 trillion had turned non-performing—an annual increase of Tk 3.88 trillion.

Central bank officials say the combined amount of NPLs, written-off loans, rescheduled loans, and loans stuck in litigation may soon exceed Tk 10 trillion.

At Least 12 Banks at Risk of Insolvency

Research organizations and internal banking sources claim:

• At least 12 banks are at serious risk of bankruptcy.

• Another 15 banks are struggling to survive.

Bangladesh Bank’s stricter monitoring and regulatory enforcement have revealed many previously undisclosed bad loans.

A senior central bank official noted:

“Many loans that were officially classified as ‘regular’ were, in reality, highly risky. Enhanced monitoring has exposed the true picture.”

Experts Warn of a Deepening Crisis

Dr. Mustafizur Rahman, Distinguished Fellow at the Centre for Policy Dialogue (CPD), said:

“The excessive burden of NPLs has pushed the banking sector into a severe crisis. Interest rates cannot be stabilized, policy rates cannot be eased, and entrepreneurs are forced to borrow at high costs—discouraging investment.”

He added:

“Greater transparency in banking operations is now revealing irregularities that had long been concealed.”

Major Business Groups Accused of Large-Scale Loan Irregularities

Various research reports and banking documents highlight allegations of significant loan fraud and misappropriation involving several major conglomerates. Key allegations include:

S. Alam Group

• Alleged irregular loans: Tk 225,000 crore

• Alleged illicit transfers abroad: Tk 125,000 crore

• Current NPLs: Tk 40,000 crore

Beximco Group

• Alleged irregular loans: Tk 53,000 crore

• NPLs: Tk 20,516 crore

Sikder Group

• Total loans: Tk 13,000 crore

• NPLs: Tk 2,100 crore

Nassa Group

• Unpaid loans: Tk 9,215 crore

Orion Group

• Unpaid loans: Tk 10,000 crore

• NPLs: Tk 1,500 crore

Nabil Group

• Unpaid loans: Tk 9,405 crore

• NPLs: Tk 7,000 crore

In addition, a major Chattogram-based business conglomerate has been accused of large-scale loan irregularities.
Industry insiders point to 2017 onward as the beginning of intensified malpractice, with 2021–2023 described as the “most damaging period” for loan defaults and financial misconduct.

Bangladesh Bank records show nearly 300 companies are now linked to loan default.

Economists warn that widespread loan default, weak governance, political influence, and inadequate oversight have pushed the banking sector toward a long-term structural crisis. To stabilize the sector, experts recommend:

• Strict recovery measures for NPLs

• Minimizing political interference in bank management

• Strong punitive action against defaulters

• Restructuring banks at risk of insolvency

According to analysts, without decisive actions, the sector may face even deeper instability in the coming years.