Bangladesh’s state-owned commercial banks are capable of disbursing loans but continue to face significant challenges in recovering them, Bangladesh Bank Governor Dr Ahsan H. Mansur has observed.
Speaking on Monday, 2 February, at the Sonali Bank Annual Conference 2026, held at the International Convention City Bashundhara (ICCB), Dr Mansur highlighted that while lending capacity exists, recovery remains a persistent issue. “When loans are extended to the right clients, defaults decrease. However, state banks are still bound by various regulatory restrictions,” he said. “As a result, lending requires caution. In practice, state banks can provide loans, but collecting them is problematic. Historically, loan disbursement has been constrained, a trend evident even prior to 2000.”
Dr Mansur emphasised that banks must ensure deposits are channelled into productive areas of the economy to achieve meaningful outcomes. He noted that Sonali Bank has been distributing loans cautiously, but in certain sectors, a bolder approach is necessary to stimulate economic activity.
He also underlined the untapped potential of the consumer lending sector. “In other countries, consumer lending represents a major segment, yet in Bangladesh, state banks contribute minimally. While housing finance is sizeable, it remains limited in scope. We can achieve much more in consumer lending,” he said.
Regarding Sonali Bank’s commercial operations, Dr Mansur commented, “Currently, it partially follows a commercial principal banking model. It must be developed into a full-scale commercial bank and made profitable.”
He shared key performance indicators from the past year, showing both challenges and progress:
| Banking Metric | Figure / Note |
|---|---|
| Last Year’s Profit | Supported capital shortfall coverage |
| Non-Performing Loan (NPL) Rate | Declined from 18%, expected to reduce further |
| Loan Disbursement | Limited, but needs expansion |
Dr Mansur indicated that the government is willing to allow Sonali Bank to operate independently as a commercial principal bank if successive administrations maintain this approach. He stressed the bank must also play a stronger role in promoting remittance inflows and supporting export sectors.
Finally, the Governor urged prudence in lending practices. Identifying reliable entrepreneurs at the grassroots level and providing targeted support to SMEs will be crucial for effective banking operations and sustainable economic growth.