Six Bangladesh State Banks Pile Up Tk 1.47 Trillion in Bad Loans: Finance Minister

🏛 Dhaka, Bangladesh — Finance Minister Amir Khosru Mahmud Chowdhury has revealed that non-performing loans (NPLs) in six state-owned commercial banks have reached approximately Tk 1.47 trillion, with Janata Bank PLC holding the highest amount among them.

📊 The minister disclosed the figures on Sunday during the third session of the Jatiya Sangsad (National Parliament) in response to a query from Md. Abdul Alim, Member of Parliament for Bagherhat-4 constituency. The session was chaired by Deputy Speaker Barrister Kayser Kamal.

💰 According to the Finance Minister, the total overdue loans of the six state-owned banks — Agrani Bank PLC, Bangladesh Development Bank PLC (BDBL), Basic Bank PLC, Janata Bank PLC, Rupali Bank PLC, and Sonali Bank PLC — stood at Tk 147,776.36 crore as of June 30, 2026.

📊 Among the state-owned banks, Janata Bank PLC reported the highest level of defaulted loans, underscoring the depth of the NPL crisis at the country’s largest state lender by issue size.

👥 The Six State Banks in Focus

🏦 The six state-owned commercial banks (SoCBs) form the backbone of Bangladesh’s banking sector, together accounting for a substantial share of total deposits and advances. Their NPL position is therefore a key barometer of the broader financial system’s health:

• 💰 Agrani Bank PLC — one of the largest state commercial banks
• 💰 Bangladesh Development Bank PLC (BDBL) — development financing institution
• 💰 Basic Bank PLC — previously the focus of major NPL cleanup
• 💰 Janata Bank PLC — highest NPL holder among the six
• 💰 Rupali Bank PLC — another major state commercial bank
• 💰 Sonali Bank PLC — the largest state-owned bank by network

💰 Tk 60,000 Crore Target for Cold Storage, Dairy, Poultry

🌾 In a separate response, the Finance Minister said Bangladesh Bank has set a target of disbursing Tk 60,000 crore in loans to the cold storage, dairy, and poultry sectors during the current fiscal year 2026-27, aiming to boost agricultural production, strengthen food security, and generate employment in rural areas.

🏛 Finance Minister informed Parliament that the loans will be distributed through all scheduled commercial banks across the country. The minister disclosed the information while responding to a written question from Mosammat Farida Yasmin, a Member of Parliament from a reserved women’s seat.

📊 The initiative underscores the government’s continued focus on revitalising the agriculture-dependent rural economy by ensuring adequate financing for key sub-sectors. Cold storage facilities are crucial for reducing post-harvest losses, while the dairy and poultry industries play a significant role in meeting the nation’s nutritional demands and providing livelihoods for millions of rural households, the minister added.

⚠ NPL Crisis: A Persistent Challenge for Bangladesh Banking

📊 The Tk 1.47 trillion NPL figure for just six state-owned banks underscores the depth of Bangladesh’s banking sector stress. Combined with NPLs across private commercial banks, foreign banks and specialised banks, the country’s total NPL position is significantly higher — reflecting years of weak credit discipline, connected lending and inadequate recovery mechanisms.

📈 For state-owned banks specifically, the NPL challenge is compounded by several structural factors:

• 👥 Directed lending: Government-mandated credit to priority sectors sometimes compromises credit quality
• 🤝 Connected lending: Loans to politically connected borrowers have historically contributed to defaults
• 📋 Weak recovery: Slow legal processes and limited collateral realisation have hampered NPL resolution
• 💰 Capital adequacy pressure: High NPLs require higher provisioning, squeezing banks’ capital positions

🌏 Strategic Context for Bangladesh Banking Sector

📊 The Finance Minister’s disclosure comes at a sensitive time for Bangladesh’s banking sector, which has been undergoing significant restructuring following the political transition earlier in 2026. The government cancelled the contractual appointments of managing directors at Agrani, BDBL and BASIC Bank, signalling a determination to address governance and performance issues at state lenders.

🤝 For Bangladesh’s broader economy, the Tk 1.47 trillion NPL position has several implications:

• 💰 Credit drag: High NPLs reduce banks’ capacity to extend fresh credit to productive sectors
• 💪 Fiscal risk: State banks may eventually require capital injections from the budget
• 📈 Investor sentiment: Persistent NPL issues weigh on confidence in the financial sector
• 🌏 LDC graduation readiness: A healthier banking sector is essential to support the more complex financial flows post-LDC graduation

✅ For policymakers and the central bank, the disclosure sets the stage for more aggressive NPL resolution measures in the coming months — including potential asset sales to asset management companies, faster resolution through the Money Loan Court Act, and tighter credit discipline in fresh lending. The Tk 60,000 crore agricultural lending target also signals the government’s intent to redirect credit towards productive rural sectors, even as it grapples with the legacy NPL burden.