A delegation from the Bangladesh Association of Banks (BAB) met with the finance minister to discuss the upcoming national budget and the stability of the country’s banking sector. The meeting focused on fiscal, regulatory, and structural reforms needed to strengthen the sector. BAB leaders highlighted key challenges including rising non-performing loans, capital adequacy pressures, weak private sector credit growth, governance failures, and declining public confidence due to economic uncertainty.

BAB reported that the overall capital adequacy ratio of the banking industry has dropped to around 3 percent, limiting banks’ ability to support growth, SME financing, job creation, and investment. The delegation called for strong recovery mechanisms, swift legal processes, and confiscation of illegally acquired assets to protect depositors’ interests. It also expressed concern over provisions in the proposed banking resolution framework that could allow former sponsors or major defaulters to re-enter the system.

The association proposed several measures including reducing corporate tax to 30 percent, full tax deductibility for loan loss provisions for five years, withdrawal of extra tax on stock dividends, faster approval of rights issues, and formation of a central asset management company. BAB reaffirmed its commitment to cooperate with the government to restore confidence and ensure long-term stability in the banking sector.