Bangladesh’s banking sector is undergoing a severe crisis marked by soaring non-performing loans, deepening capital shortfalls, and reduced private investment due to heavy government borrowing. As of September 2025, non-performing loans reached 35.73 percent, while banks faced a provisioning gap of over Tk 1 trillion in 2024. The World Bank estimates that recapitalizing the sector would require 10 percent of GDP, or about Tk 5.5–6 trillion. Government borrowing from banks tripled between December 2020 and December 2025, reaching Tk 5.99 trillion, pushing private sector credit growth down to 6.03 percent in January 2026.

The article argues that this is not merely a banking crisis but a national economic priority requiring immediate policy action. It calls for asset recovery mechanisms, legal reforms, recapitalization with strict accountability, tax incentives for transparency, and modernization of collateral systems. It also recommends reducing government borrowing from banks, improving tax collection through digital integration, and promoting a cashless economy.

The author stresses that the success of these measures depends on ensuring the effective independence of Bangladesh Bank to restore public confidence in the financial system.