Bangladesh Bank has quietly extended an emergency loan of Tk 1,500 crore to AB Bank listed on the stock market and currently facing severe difficulties in meeting depositors’ withdrawals and large corporate obligations. This has been described as a final attempt to rescue the country’s first private commercial bank, whose liquidity crisis has become so critical that the central bank had to provide such a substantial “lifeline.” The 90-day liquidity support was approved on 16 November by Bangladesh Bank Governor Ahsan H. Mansur, with the interest rate set at 11.50 percent. The amount was deposited into AB Bank’s account at Bangladesh Bank’s Motijheel office immediately after the bank submitted its promissory note that same day.
This massive new financial assistance has further increased AB Bank’s overall debt burden. Previously, the bank had taken Tk 780 crore in loans from the central bank in three phases, of which only Tk 10 crore has been repaid. As a result, the bank’s total outstanding dues to the central bank now stand at Tk 2,270 crore.
According to internal records, deposit withdrawals of Tk 842 crore since September have caused severe pressure on AB Bank’s deposits. The bank currently has only Tk 6.42 crore in its clearing account with Bangladesh Bank, an amount so low that branches are frequently unable to meet customers’ withdrawal requests.
In a letter to the Governor, AB Bank’s Managing Director Syed Mizanur Rahman expressed deep concern, warning that the acute liquidity shortage has created “panic among depositors and employees” and put branches at risk of “serious unrest.” During a meeting with the Governor on 3 November, the bank initially sought a massive Tk 6,000 crore fund to ease the crisis. Later, on 12 November, its Board approved a request for Tk 2,500 crore in emergency liquidity support, following which Chairman Khaisar A. Chowdhury and MD Syed Mizanur Rahman formally appealed to the Governor.
Board records show that due to this crisis, more than Tk 2,000 crore belonging to various state-owned and private organisations has become stuck. Notable among these are Tk 202 crore of the Bangladesh Power Development Board, Tk 35 crore of Palli Bidyut Samiti, Tk 378 crore of Bangladesh Krishi Bank, Tk 1,307 crore of ASA Bangladesh, and large amounts belonging to various electricity and gas distribution entities. The bank has also failed to settle a Tk 528 crore Letter of Credit (LC) for Bangladesh Petroleum Corporation.
Once praised for its service quality and customer growth, AB Bank has for years been plagued by high-level corruption, irresponsible insider lending, and “predatory” activities by sponsor-directors. Its financial position is now extremely grim. By September, its non-performing loans had surged to Tk 30,143 crore around 84 percent of total outstanding loans. Fifty-six percent of these bad loans are concentrated among the top 20 borrowers. After years of misappropriation, the bank suffered a record loss in 2024: earnings per share fell to a loss of Tk 21.28, and its consolidated annual loss stood at Tk 1,906 crore a dramatic collapse from the Tk 90 crore profit recorded in 2023.
