The strength, stability and trustworthiness of Bangladesh’s banking sector will play a decisive role in shaping the country’s future growth as it moves toward upper-middle-income status, said the International Chamber of Commerce–Bangladesh (ICCB).
In the editorial of its latest News Bulletin (October–December 2025), released today, the ICCB described the banking industry as the central pillar of the national economy, noting its key role in mobilising savings, supporting trade, financing investment and creating jobs.
However, the editorial cautioned that the sector is now at a crucial turning point, burdened by deep-rooted structural weaknesses. It stressed the urgent need for stronger governance, improved accountability and a fully independent and empowered central bank to restore confidence.
The report identified the surge in non-performing loans (NPLs) as the most serious challenge. According to the ICCB, classified loans have exceeded Tk 6.44 lakh crore, accounting for nearly 35.7 per cent of total outstanding credit—an extremely high ratio by global benchmarks. Such elevated NPLs, the editorial said, erode banks’ financial strength, constrain fresh lending and deter both local and foreign investment, posing broader risks to macroeconomic stability.
While acknowledging recent regulatory steps that have improved the reporting of defaulted loans, the ICCB emphasised the importance of differentiating between intentional defaulters and firms facing genuine business difficulties. It argued that deliberate financial wrongdoing must be dealt with firmly, while viable businesses should be given appropriate restructuring support.
Referring to recent reforms, the editorial noted the enactment of the Bank Resolution Ordinance 2025, described as the most significant financial-sector intervention in the country’s history. Under the new law, five Shariah-based banks were merged into a single state-owned institution to reduce systemic risk and protect depositors.
Although consolidation can help contain contagion, the ICCB pointed out that experts have raised concerns over compliance with the Companies Act, particularly regarding shareholder consent in the merger of publicly listed entities. The editorial maintained that the effectiveness of such initiatives ultimately depends on transparency, sound governance and modern risk-management practices.
The ICCB also underscored the critical role of an independent, professional Bangladesh Bank. International experience, it said, shows that central bank autonomy is vital for managing financial stress, sustaining market confidence and attracting long-term investment. Over the past two years, Bangladesh Bank has taken exceptional measures, including liquidity support and refinancing schemes, to safeguard depositors and maintain stability.
Nevertheless, the report stressed that while emergency interventions are useful during crises, sustainable financial health can only be achieved through disciplined lending, robust supervision and good governance.
Looking ahead, the ICCB called for comprehensive reforms to support Bangladesh’s ambitions in export diversification, technological advancement and infrastructure expansion. These include decisive action against willful defaulters, alignment with global compliance standards and continuous strengthening of regulatory capacity.
The editorial concluded that building a resilient banking system is a shared responsibility. Regulators, bank boards, management, policymakers and the business community must work together to establish a financial sector that earns trust at home and abroad and supports long-term economic growth.
