Bangladesh鈥檚 banking sector faces deepening vulnerabilities amid looming US tariffs and stalled IMF loan disbursements, which require urgent structural reforms to protect the economy and restore financial stability, speakers said at a seminar on Wednesday.
At the event titled 鈥楪lobal Financial Trends and Reforms: Implications for Bangladesh,鈥� organised by the International Chamber of Commerce Bangladesh, experts warned that rising non-performing loans (NPLs), declining export competitiveness, and regulatory weaknesses are compounding a confidence crisis among depositors.
ICC Bangladesh president Mahbubur Rahman highlighted the World Bank鈥檚 latest warning that NPLs have doubled to Tk聽2.9 trillion, with nearly half concentrated in nine state-owned banks.
He cautioned that additional US tariffs could sharply reduce export earnings 鈥� 83 per cent of which come from the garment sector 鈥� tightening dollar liquidity and increasing default risks.
He said 鈥業t is therefore imperative for Bangladesh to adopt resilient financial strategies and regulatory reforms that safeguard economic stability in the face of these external shocks.鈥�
He also said despite the economy鈥檚 resilience in many areas, structural weaknesses within the financial sector remain a critical challenge.
This underscores the urgent need for comprehensive banking reforms, enhanced regulatory oversight and strategic policy interventions to bolster financial sector confidence and ensure sustainable economic growth in the coming years, Mahbubur Rahman said.
Florian Witt, chair of the ICC Global Banking Commission, recommended urgent recapitalisation of state-owned banks, mergers supported by forensic audits, and adoption of global standards for loan classification.
He noted that the financial sector must adapt to rapidly changing global trends, particularly those driven by artificial intelligence and geopolitical shifts.
Witt also warned that Bangladesh鈥檚 continued resistance to a market-based exchange rate, as advised by the IMF, could affect the country鈥簊 credit rating and stall further loan disbursements that risk undermining macroeconomic stability.
Bangladesh Bank deputy governor Md Zakir Hossain Chowdhury acknowledged irregularities and systemic weaknesses but argued that reform initiatives are underway and need time to show results.
However, other participants stressed that progress must be faster and visible to rebuild public trust.
ICC vice-president AK Azad said higher tariffs will disproportionately impact the ready-made garment sector and spill over into services.
He sought timely policy support, exchange rate flexibility, and settlement of pending insurance claims from politically damaged businesses.
Azad also called for greater engagement from global institutions like the WTO and ICC to assist countries like Bangladesh.
Bangladesh Institute of Bank Management (BIBM) professor Shah Md Ahsan Habib and Asain Development Bank鈥檚 lead investment officer Bidyut Kumar Saha underscored that banking sector require stronger central bank oversight and a shift toward capital market-based financing.
While some bankers, including BRAC Bank MD Selim RF Hussain and HSBC CEO Mahbub Ur Rahman, noted modest gains in reserves and remittances, they emphasised the need for better policy coordination across ministries, regulators, and the private sector to face external shocks.
Standard Chartered Bangladesh MD Enamul Huque stressed the need for strategic export diversification, particularly toward higher-value segments like manmade fiber, to cushion the impact of global trade shifts.
