Bangladesh faces a banking crisis as bad loans climb to dangerous levels. Business leaders gathered at a Dhaka Chamber meeting Saturday to discuss the growing problem. Non-performing loans reached 4.2 trillion taka during mid-2025. The amount jumped from 3.45 trillion taka just six months earlier. Bad loans represent more than 24 percent of all money lent to borrowers.
Chamber President Taskeen Ahmed said the situation hurts confidence among businesses seeking credit. Banks demand higher security deposits and charge more interest on new loans. Poor management and weak collection systems helped create the problem. Ahmed wants the government to extend loan deadlines for struggling companies. He believes giving businesses six extra months could prevent many from failing.
Interest rates rose sharply during 2025 as banks became more careful about lending money. Companies paid 9 percent interest before but rates jumped to 14 percent this year. Private businesses must spend an extra 1.39 trillion taka on interest payments. Former chamber leader Ashraf Ahmed said energy shortages make the crisis worse. Industries could lose half their production if gas supplies remain limited.
Banking officials admit political interference damaged the sector after 2014. Fourteen weak banks control 40 percent of all bad loans. Better-managed banks keep their problem loans between 5 and 7 percent. Experts recommend fixing court systems and creating asset management companies. They want banks to work more closely with borrowers instead of treating them as enemies.
Chamber President Taskeen Ahmed said the situation hurts confidence among businesses seeking credit. Banks demand higher security deposits and charge more interest on new loans. Poor management and weak collection systems helped create the problem. Ahmed wants the government to extend loan deadlines for struggling companies. He believes giving businesses six extra months could prevent many from failing.
Interest rates rose sharply during 2025 as banks became more careful about lending money. Companies paid 9 percent interest before but rates jumped to 14 percent this year. Private businesses must spend an extra 1.39 trillion taka on interest payments. Former chamber leader Ashraf Ahmed said energy shortages make the crisis worse. Industries could lose half their production if gas supplies remain limited.
Banking officials admit political interference damaged the sector after 2014. Fourteen weak banks control 40 percent of all bad loans. Better-managed banks keep their problem loans between 5 and 7 percent. Experts recommend fixing court systems and creating asset management companies. They want banks to work more closely with borrowers instead of treating them as enemies.
