Regional disparity is increasing in Dhaka-centric financial flows

Bangladesh has achieved remarkable economic progress over the past few decades, driven by rapid industrialisation, export-led growth, infrastructure expansion, and a steady inflow of remittances. These factors have collectively strengthened the country’s macroeconomic foundation. However, beneath this progress lies a growing structural concern: economic development remains heavily concentrated in a limited number of urban centres, particularly Dhaka and Chattogram, leaving much of the country’s remaining regions comparatively underdeveloped in financial terms.

According to the Bangladesh Bank’s quarterly report for October–December 2025, total deposits in the banking system stood at approximately BDT 20,05,338 crore, while total outstanding loans reached around BDT 17,77,316 crore. While these figures reflect strong financial depth and liquidity in the economy, their geographical distribution reveals a significant imbalance in access to financial resources.

Urban–Rural Divide in Financial Access

The disparity between urban and rural financial inclusion is particularly stark. Nearly 84 per cent of total deposits originate from urban areas, while rural regions account for only 16 per cent. The situation is even more uneven in credit distribution, where approximately 92 per cent of total loans are concentrated in urban centres, leaving rural areas with a mere 7–8 per cent share.

This indicates that banking services, investment flows, and credit facilities remain overwhelmingly urban-centric. As a result, rural economies struggle to access adequate financing, significantly constraining the growth of local enterprises, small businesses, and agricultural value chains.

Regional Distribution of Banking Activity

A closer look at divisional data highlights the extent of regional concentration in financial activity:

The data clearly illustrates that Dhaka alone dominates the financial landscape, accounting for over 60 per cent of total deposits and nearly two-thirds of total credit distribution. Chattogram remains the second most significant hub, supported by its strategic port facilities and export-oriented industries. However, the gap between these two leading divisions and the rest of the country remains substantial.

Divisions such as Khulna and Rajshahi occupy a middle position, while Sylhet, Barishal, Rangpur, and Mymensingh lag significantly behind. Mymensingh, in particular, reflects the lowest share, underscoring the depth of regional imbalance.

Structural Drivers of Inequality

Several structural factors underpin this uneven distribution of financial activity. The concentration of industries, corporate headquarters, and financial institutions in Dhaka has created a self-reinforcing economic hub. Chattogram’s prominence is largely driven by its international port and associated trade activities.

Moreover, superior infrastructure, including transport networks, energy supply, and access to skilled labour, continues to attract investment to major urban centres. Investors also tend to favour established economic zones to minimise risk, further intensifying concentration. Additionally, the geographical clustering of the ready-made garment sector in and around Dhaka contributes significantly to this imbalance.

Wider Economic and Social Implications

If left unaddressed, this growing disparity may lead to several long-term challenges. Regional inequality is likely to deepen further, undermining balanced national development. Rural economies may remain structurally weak due to limited access to credit and investment, restricting entrepreneurship and job creation.

This imbalance also accelerates rural-to-urban migration, placing increasing pressure on urban infrastructure, housing, transport systems, and public services. Over time, such strain may reduce urban liveability while leaving rural regions underutilised in terms of agricultural potential, natural resources, and human capital.

International Experience and Policy Direction

Countries such as South Korea, Malaysia, and Viet Nam initially experienced similar urban-centric growth patterns. However, through deliberate policy interventions focused on decentralisation, industrial dispersal, and regional investment incentives, they succeeded in achieving more balanced territorial development. Their experience offers valuable lessons for Bangladesh.

Conclusion

While Bangladesh’s economy remains fundamentally strong, its geographical distribution of financial resources is increasingly uneven. Continued concentration in Dhaka and Chattogram risks undermining long-term sustainability. A more inclusive development strategy—spreading investment, industry, and financial services across all regions—is essential.

Only through balanced regional growth can development become truly equitable, ensuring that economic progress reaches all citizens, beyond geographical boundaries and in line with principles of inclusivity and shared prosperity.