Bangladesh’s banking sector is grappling with a deepening crisis, with the latest independent audit for the June quarter revealing a combined capital shortfall of Tk 1.55 trillion among 24 banks. This alarming deficit is largely driven by surging non-performing loans (NPLs) and past irregularities.

According to Bangladesh Bank, four state-owned commercial banks, two specialized banks, and 18 private banks failed to meet minimum capital requirements. This exposes the broader financial sector to significant systemic risk.

Economic analyst Mamun Rashid warns, “Stability in the banking sector is essential for overall financial sector stability. But achieving this will require long-term planning and political stability.”

The shortfall surged from Tk 1.10 trillion in March to Tk 1.55 trillion in June. Bank CEOs report that the increase is due to previously hidden or “evergreened” debts now being recognized as genuine defaults.

The most affected banks include Bangladesh Krishi Bank (Tk 29,161 crore), Union Bank (Tk 21,387 crore), Islami Bank Bangladesh (Tk 18,504 crore), and Janata Bank (Tk 17,025 crore). Islamic banks and Shariah-based banks contribute significantly to the shortfall.

Professor Shohidul Islam of Dhaka University states, “Governance failures and lax lending practices have forced regulators to confront a crisis that may require extensive government intervention. Some banks could take 20–30 years to restore standard balance sheets.”