In a groundbreaking move for the country’s financial sector, BRAC Bank has received approval from the Bangladesh Securities and Exchange Commission (BSEC) and the Bangladesh Bank to issue Bangladesh’s first-ever Social Subordinated Bond.

The bond, titled “BRAC Bank Social Subordinated Bond”, is valued at Tk 1,000 crore and aims to enhance the bank’s Tier-2 capital base, strengthening its capacity to support key sectors of the economy. These include CMSMEs (Cottage, Micro, Small and Medium Enterprises), women entrepreneurship, agriculture, food security, affordable housing, and healthcare and sanitation.

Crafted in alignment with the ICMA Social Bond Principles 2025, the bond framework has received Second Party Opinion certification from S&P Global Ratings, marking another first for the country. This international endorsement validates the bond’s adherence to global standards of transparency, accountability, and sustainability.

“This is a major milestone for us,” said Tareq Refat Ullah Khan, Managing Director and CEO of BRAC Bank. “The Social Subordinated Bond will empower small and medium enterprises, accelerate progress for women entrepreneurs, improve food security, and boost access to vital services like healthcare and housing. We believe this initiative will open a new chapter for sustainable innovation in Bangladesh’s capital market.”

The initiative underscores BRAC Bank’s growing leadership in sustainable finance. The bank has consistently ranked at the forefront of responsible banking in the country, with 82% of its loan portfolio currently allocated to sustainable sectors.

In 2024, BRAC Bank was ranked top among Bangladeshi institutions in the Bloomberg ESG Ratings, and for five consecutive years, it has been recognized by the Bangladesh Bank as the Top Sustainable Bank. Most recently, the bank was awarded “Sustainable SME Financier of the Year – Asia” at the Global SME Finance Awards 2025.

The issuance of this social bond is expected to set a precedent for other financial institutions in Bangladesh to explore innovative, responsible financing instruments that align with global sustainability goals.

With this step, BRAC Bank not only reinforces its commitment to inclusive economic growth but also contributes to the development of a more resilient and equitable financial ecosystem in Bangladesh.