Commercial banks in Bangladesh are increasingly directing investments toward government Treasury bills and bonds rather than productive private-sector financing, according to the report published on August 10, 2026. At the end of March, government securities accounted for 91.32 percent of banks’ total investments, while other sectors received 8.68 percent. Bangladesh Bank Governor Mostaqur Rahman recently instructed banks in a meeting to increase new lending.

During the March quarter, bank investment in government securities rose 10 percent, while investment in other sectors fell 0.83 percent and loan growth was only 0.37 percent. BKMEA President Mohammad Hatem said entrepreneurs were reluctant to borrow because gas and electricity shortages put investments at risk. Bangladesh Steel Mills Association founding president Sheikh Masadul Alam said banks were focusing more on recovering existing loans than issuing new ones.

In 2025, government securities represented 67.46 percent of banks’ investments. Banks recorded a Tk12,537 crore loss in net interest income that year, while non-interest income from Treasury operations and investments rose to Tk83,171 crore. The government plans to borrow Tk1.12 lakh crore from the banking system in the current fiscal year to finance the budget deficit.