Bangladesh Banks Face Trillion-Taka Losses
Bangladesh’s banking sector faces a severe challenge. A new report shows 22 out of 61 banks are operating with huge financial losses. These accumulated losses total Tk 2.54 trillion as of March. Bangladesh Bank presented this report on Sunday. It went to the Parliamentary Standing Committee on the Ministry of Finance.
The banking sector recorded an operating profit of Tk 7.89 billion in March. However, it showed a net loss of Tk 84.17 billion after all calculations. This shows serious financial problems for many banks.
Four state-owned banks, two specialized banks, and one foreign bank have losses. Fifteen private banks are also struggling financially.
Bangladesh Bank explained the causes for these losses. A main reason is a high volume of unpaid loans. Banks must also set aside money for bad loans. Other factors include capital shortages and weak asset quality. These issues reduce the banks’ ability to earn money.
Agrani Bank Chairman Syed Abu Naser Bakhtiar spoke about the situation. He said past corruption caused these problems. Efforts are ongoing to fix them. Many struggling private banks had links to the previous government. Irregularities and improper loans worsened their finances.
Unpaid loans in the banking sector are increasing. As of June 30, these loans reached Tk 6.07 trillion. This is about 33 percent of all loans. Economist Zahid Hussain said this is unhealthy for the economy. He warned that public trust in banks is being harmed.
Fifteen banks failed to keep enough capital by March. Bangladesh Bank provided emergency support for cash shortages. Twelve banks received nearly Tk 850 billion in liquidity support by September 27. This assistance helps banks meet urgent cash needs.
The parliamentary committee discussed solutions for the banking sector. Members proposed reforms to prevent future unpaid loans. One member suggested reducing the total number of banks in Bangladesh. Finance Minister Amir Khosru Mahmud Chowdhury attended the meeting. He said the government would be open and accountable.
