BSEC Approves Tk 3,500 Crore Bond Issuance Plan For Five Bangladesh Banks Including BRAC Bank Green Bond

💰 The Bangladesh Securities and Exchange Commission (BSEC) has approved bond proposals worth a combined Tk 3,500 crore from five private commercial banks, in one of the largest single-day regulatory greenlights for bank capital raising in recent memory. The approvals, granted at the commission''s meeting on Tuesday 29 September 2026, cover One Bank, Southeast Bank, BRAC Bank, Al-Arafah Islami Bank and Bank Asia.

📊 The five issuances are split between conventional Tier-II capital strengthening bonds and dedicated green and sustainable finance instruments, reflecting Bangladesh''s twin push to comply with Basel III capital adequacy norms and to scale up climate-aligned banking. All five bonds will be placed privately with institutional investors, provident and gratuity funds, and high-net-worth individuals — meaning retail investors on the Dhaka Stock Exchange will not have direct access to the issuances.

🏛 Bank-by-bank breakdown

The approvals span a wide range of structures, tenors and use-of-proceeds categories. Below is the bank-by-bank breakdown based on the BSEC''s clearance:

• ✅ One Bank — Tk 400 crore: Unsecured, non-convertible, fully redeemable, floating-rate subordinated bond with a coupon of reference rate plus 3%. Privately placed with institutional investors and HNWIs. Trustee: Green Delta Capital. Issue manager: UCB Investment. Listing: Main Board.
• ✅ Southeast Bank — Tk 800 crore: Seven-year subordinated bond, floating-rate, coupon of reference rate plus 3%. Proceeds to strengthen Tier-II capital. Trustee: DBH Finance. Issue manager: UCB Investment. Listing: Main Board.
• ✅ BRAC Bank — Tk 1,000 crore (largest): Three-year zero-coupon green bond with a potential discount rate of 8.5% and a face value of Tk 10 lakh per unit. Proceeds will fund low-cost green financing to eligible customers. Privately placed with corporate institutions, provident and gratuity funds, HNWIs. Trustee: Prime Bank Investment. Issue manager: IDLC Investments.
• ✅ Al-Arafah Islami Bank — Tk 500 crore: Seven-year floating-rate subordinated bond, coupon of reference rate plus 3%. Proceeds to strengthen Tier-II capital under Basel III. Trustee: DBH Finance. Issue manager: UCB Investment.
• ✅ Bank Asia — Tk 800 crore: Seven-year sustainable subordinated bond, coupon of reference rate plus 3%. Proceeds to strengthen Tier-II capital and finance or refinance eligible green and sustainable projects. Trustee: DBH Finance. Issue manager: Prime Bank Investment. Listing: Main Board.

👥 Why this matters for Bangladesh''s banking sector

The approvals land at a critical moment for Bangladesh''s banking sector, which is under pressure on multiple fronts. Private-sector credit growth has stayed below 5% for six straight months, bank exposure to large defaulting groups remains a systemic concern, and the regulator has been pushing lenders to rebuild capital buffers that were eroded by loan-loss provisions and weak earnings over recent quarters.

Subordinated bonds allow banks to raise long-term Tier-II capital without diluting existing shareholders through new equity issuance — an attractive route given that Dhaka Stock Exchange bank stocks have been under sustained selling pressure, with the DSEX losing 71 points over the four sessions to 29 September. By going the private placement route, the five banks sidestep the need to court volatile retail demand and can tap institutional pools of capital that are actively looking for medium-term fixed-income instruments.

Bangladesh''s biggest banks have been steadily building out their green finance books over the past two years in response to Bangladesh Bank''s refinance schemes for green and ICT sectors, and to international pressure from buyers and development partners to align industrial financing with climate goals. BRAC Bank''s Tk 1,000 crore zero-coupon green bond — the largest single issuance in Tuesday''s approvals — explicitly channels the proceeds into low-cost green financing for eligible customers, marking one of the most sizeable dedicated green bond issuances by a Bangladeshi private commercial bank to date.

🤝 Role of trustees and issue managers

The approvals also spotlight the increasingly important role of specialist non-bank financial institutions in structuring and underwriting bond issues. Green Delta Capital and DBH Finance are acting as trustees across multiple issuances, while UCB Investment, Prime Bank Investment and IDLC Investments are shouldering issue management duties. This division of labour reflects the maturing of Bangladesh''s debt capital market, where merchant banks and NBFIs are building dedicated capacity for trustee, issue management and underwriting services that go beyond traditional commercial bank lending.

Trustee arrangements matter for bondholders because the trustee holds the security on behalf of investors and enforces covenants — a critical safeguard in a market where bondholder rights and disclosure standards are still developing. The choice of merchant bankers as issue managers also indicates the five banks are willing to pay the structuring fees required to ensure their issues meet institutional investor due-diligence requirements.

🌏 Green and sustainable bonds in focus

BRAC Bank''s Tk 1,000 crore zero-coupon green bond and Bank Asia''s Tk 800 crore sustainable subordinated bond together account for more than half of the Tk 3,500 crore total — a signal that Bangladesh''s private commercial banks are increasingly using labelled bonds to channel capital into climate-aligned lending. The structure of BRAC Bank''s bond — three-year tenor, zero-coupon, discounted at 8.5%, face value of Tk 10 lakh per unit — is specifically designed to appeal to corporate treasuries and provident funds looking for predictable fixed-income instruments with shorter duration.

For Bangladesh''s broader sustainable finance agenda, the BSEC''s clearance for these two bonds is significant because it creates a fresh pool of dedicated green capital that commercial banks can on-lend to eligible customers — typically exporters investing in energy-efficient machinery, LEED-certified factories, rooftop solar, or water and waste management systems. This matters for export-oriented sectors such as RMG and textiles, where international buyers are tightening sustainability requirements and where Bangladesh Bank''s own Tk 1,000 crore green refinance scheme has been oversubscribed.

💰 Strategic context for Bangladesh''s capital markets

The Tk 3,500 crore combined approval is also a notable boost for Bangladesh''s domestic bond market, which has historically been shallow relative to the country''s bank-centric financial system. By clearing five bank bond issuances in a single meeting, the BSEC is signalling a more permissive approach to capital-raising via debt instruments — an important shift given the regulator''s recent focus on improving corporate governance and disclosure standards at listed companies.

For One Bank, Southeast Bank, Al-Arafah Islami Bank and Bank Asia, the Tier-II capital raised through these subordinated bonds will directly improve their capital adequacy ratios, giving them additional headroom to grow their loan books and absorb future credit losses. For BRAC Bank, the green bond opens a dedicated funding channel that should help it scale its environmental finance portfolio and meet international sustainability-linked reporting requirements.

For Bangladesh''s broader financial sector, the cumulative message from Tuesday''s approvals is clear: banks are turning to the debt capital market in earnest to shore up capital, finance green projects and diversify funding away from traditional deposit-based lending. With Basel III compliance deadlines approaching and the regulator pushing for stronger capital buffers, more bank bond issuances are expected in the coming months — particularly from mid-sized private commercial banks looking to strengthen their Tier-II capital without diluting existing shareholders.