The Bangladeshi government’s unpaid remittance incentive bills to commercial banks have now surpassed Tk4,000 crore, creating mounting liquidity pressures and squeezing profitability across the banking sector.
Under the scheme, banks pay a 2.5% cash incentive on remittance inflows on behalf of the government and are subsequently reimbursed through Bangladesh Bank. However, reimbursements have been delayed for over three months, forcing banks to fund incentives from their own deposits.
A senior finance ministry official reported that arrears had reached Tk3,500 crore by November 2025, rising by an additional Tk500 crore in December, buoyed by continued strong remittance inflows. Expatriates sent over $2 billion in the first 17 days of December alone, further exacerbating the unpaid incentive burden.
Former World Bank lead economist in Dhaka, Zahid Hussain, warned that banks are effectively carrying a government subsidy without any formal provisioning framework. “If delays persist, banks could face serious operational and financial challenges,” he said.
Outstanding Incentive Dues (as of 30 November 2025)
| Bank | Outstanding Dues (Tk crore) |
|---|---|
| City Bank | 185 |
| BRAC Bank | 445 |
| Trust Bank | 400 |
| Pubali Bank | 160 |
| Total | 1,190 |
Bank officials noted that reimbursements historically occurred within a month, but now delays of three to five months are common. This has forced banks to bridge incentive payments using depositor funds, affecting liquidity and limiting opportunities for income-generating investments, such as 364-day treasury bills yielding 10.72%.
Impact on Bank Profitability and Liquidity
Incentive delays reduce investable funds. For instance, $100,000 in remittances at Tk122.30 per dollar generates a Tk1.22 crore payment obligation; including the 2.5% incentive, more than Tk1.25 crore comes directly from banks’ own funds.
Delayed reimbursements cut potential returns on treasury investments, reducing banks’ overall profitability.
Mid-tier and smaller banks face greater stress compared with top-tier lenders.
Bank leaders, including Syed Mahbubur Rahman of Mutual Trust Bank and Mohammad Ali of Pubali Bank, stressed that prolonged delays complicate fund management and could hamper service delivery to remittance senders.
Bangladesh Bank spokesperson Arief Hossain Khan confirmed that while delays occur, the government intends to settle all outstanding incentives, with no risk of permanent default.
Analysts suggest that the government must reassess its funding mechanism and release arrears promptly to avoid prolonged stress on banks, particularly as remittance inflows continue to grow and subsidy burdens rise.