B Mirror Report:  State-owned BASIC Bank has sought government approval to open and operate accounts of government and donor-funded development projects in a bid to strengthen its deposit base, reduce funding costs and improve its financial position.

In a recent letter to the Finance Ministry, Deputy Managing Director Abu Md Mofazzal requested necessary steps to allow the bank to manage such accounts, according to official sources.

The bank said its heavy reliance on high-cost deposits, coupled with a large volume of classified loans, has significantly increased its cost of funds and constrained profitability.

BASIC Bank noted that it has already submitted a time-bound recovery plan to the Financial Institutions Division (FID) and Bangladesh Bank and is actively working to attract low-cost and zero-cost deposits as part of its turnaround strategy.

Currently, government and donor-funded project accounts are mainly handled by state-owned banks such as Sonali Bank, Janata Bank, Agrani Bank and the House Building Finance Corporation, which benefit from lower funding costs due to access to cheap and non-interest-bearing deposits.

The bank argued that inclusion in this segment would significantly reduce its funding costs and support its return to profitability.

Officials said BASIC Bank has been showing gradual improvement under its reform efforts, with the number of accounts rising to 48,740 as of December 2025.

The bank has an authorised capital of Tk 55 billion and a paid-up capital of Tk 10.85 billion.

BASIC Bank’s financial difficulties stem from a period of large-scale loan irregularities between 2009 and 2011, when Bangladesh Bank investigations found around Tk 35 billion in improper loan disbursements. The bank’s board was later dissolved in 2014 following regulatory action.

It is now implementing a three-year action plan aimed at reducing non-performing loans and restoring financial stability through recovery and reform measures. A Finance Ministry official said the proposal is under review.