The capital shortfall in 24 banks soared to Tk 1,55,866 crore by the end of June 2025.
The situation deteriorated rapidly after the political change on August 5, when Bangladesh Bank began disclosing the true financial conditions of banks, revealing massive volumes of previously hidden defaulted loans.
Under the former Awami League government, several politically connected business groups and bank directors allegedly engaged in window dressing of balance sheets to conceal non-performing loans (NPLs).
Once those concealed defaults surfaced, many banks failed to maintain the required provisions against bad loans, leading to severe capital erosion and risking the stability of the entire financial system.
According to Bangladesh Bank鈥檚 latest report, the sector鈥檚 capital-to-risk-weighted-assets ratio (CRAR) dropped to 4.47 per cent at the end of June 2025 鈥� less than half the international minimum standard of 10 per cent.
The ratio was 6.74 per cent in March 2025 and had improved from 3 per cent recorded in December 2024.
The report showed that four state-owned banks, 10 private commercial banks, eight Shariah-based banks, and two specialised banks were in capital deficit as of June.
Among the state-run banks, Janata Bank reported the largest shortfall of Tk聽17,025 crore, followed by Agrani Bank with Tk聽7,698 crore, Rupali Bank with Tk 4,173 crore, and BASIC Bank with Tk 3,783 crore.
In the Shariah-based banking segment, Union Bank recorded the highest capital deficit at Tk 21,387 crore, followed by Islami Bank Bangladesh with Tk聽18,504 crore and First Security Islami Bank with Tk 10,501 crore.
Global Islami Bank, Social Islami Bank, ICB Islamic Bank, EXIM Bank, and Al-Arafah Bank also reported deficits ranging from Tk 254 crore to Tk 5,552 crore.
Among conventional private banks, National Bank had the largest shortfall at Tk 8,459 crore, followed by AB Bank (Tk 6,775 crore), Padma Bank (Tk 5,619 crore), IFIC Bank (Tk 4,051 crore), Bangladesh Commerce Bank (Tk 1,878 crore), Premier Bank (Tk 1,640 crore), United Commercial Bank (Tk 1,385 crore), NRBC Bank (Tk 316 crore), Citizen Bank (Tk 86 crore), and Shimanto Bank (Tk 45 crore).
The situation is most critical among specialised banks. Bangladesh Krishi Bank alone reported a staggering deficit of Tk聽29,161 crore 鈥� the highest of any bank 鈥� while Rajshahi Krishi Unnayan Bank posted a Tk 2,620 crore shortfall.
Bangladesh Bank officials said that the deep capital erosion stemmed from years of political interference, loan fraud, and weak regulation under the previous government.
As of June 2025, total NPLs in the banking sector exceeded Tk 6 lakh crore 鈥� roughly 31 per cent of total loans 鈥� the highest proportion in South Asia.
They said that it would tighten supervision, enforce stricter provisioning requirements, and move ahead with bank merger initiatives to restore depositor confidence and bring stability to the fragile financial sector.
