State-owned BASIC Bank has formally requested government approval to open and operate bank accounts for state and donor-funded development projects. The strategic move is intended to strengthen the institution’s deposit base, drive down funding costs, and improve its overall financial stability.
In a recent correspondence dispatched to the Ministry of Finance, the Deputy Managing Director of BASIC Bank, Abu Md Mofazzal, urged the relevant authorities to initiate the legislative and administrative steps required to grant the bank account-management clearance for these specific funds.
High-Cost Deposits Hamper Recovery Plans
The communication highlighted that the distressed state-owned bank continues to face critical structural challenges owing to its heavy reliance on high-interest-bearing deposits. The bank’s leadership stated that achieving sustainable profitability remains impossible while it is burdened by a vast volume of classified loans alongside high-cost liabilities, both of which artificially inflate its cost of funds.
In response to its financial difficulties, BASIC Bank recently submitted a structured, time-bound turnaround strategy to the Financial Institutions Division (FID) of the Ministry of Finance and the central bank, Bangladesh Bank. A core pillar of this recovery roadmap involves a concentrated effort to attract low-cost and zero-interest institutional deposits.
Presently, public sector accounts and donor-funded project finances are predominantly managed by other major state-owned commercial banks and specialised financial institutions. These entities leverage their access to non-interest-bearing public funds to maintain a highly competitive cost of funds, directly boosting their balance sheets.
Comparison of State-Owned Financial Institutions and BASIC Bank Capital Structure
The table below outlines the primary public sector institutions historically entrusted with government project accounts alongside the current financial capital position of BASIC Bank:
| Institution Name | Institutional Type | Access to Low-Cost Project Deposits | BASIC Bank Capital Specifications (As of Dec 2025) |
| Sonali Bank | State-Owned Commercial Bank | Yes | Authorized Capital: BDT 55.00 Billion |
| Janata Bank | State-Owned Commercial Bank | Yes | Paid-Up Capital: BDT 10.85 Billion |
| Agrani Bank | State-Owned Commercial Bank | Yes | Total Active Client Accounts: 48,740 |
| House Building Finance Corp. | Specialised Financial Institution | Yes | Current Restructuring Plan: Three-Year Strategy |
Historical Violations and Contemporary Restructuring
BASIC Bank argued that securing access to these project accounts would drastically compress its interest expenses and accelerate its transition toward commercial viability. The management further asserted that, backed by state assistance, the bank has already achieved steady operational growth, with its total active customer accounts reaching 48,740 by December 2025.
The institutional decay of BASIC Bank tracks back to the tenure of its former chairman, Sheikh Abdul Hye Bachchu, who assumed leadership in September 2009 for a three-year term and subsequently secured a two-year extension in 2012. Central bank investigations later revealed that Bachchu and several board members engaged in gross irregularities by approving massive credit facilities in direct violation of the Bank Company Act. The government ultimately dissolved the board of directors in 2014.
According to Bangladesh Bank findings, approximately 35 billion Taka in fraudulent loans was illegally disbursed between 2009 and 2011, primarily out of the bank’s Gulshan, Dilkusha, and Shantinagar branches. To remediate this legacy portfolio, BASIC Bank is presently executing a comprehensive three-year action plan targeted at reducing its non-performing loans through aggressive recovery drives and compliance reforms.
A senior official within the Ministry of Finance confirmed receipt of the bank’s deposit proposal, stating that the ministry is currently examining the feasibility of the request.