Seventeen banks reported a staggering provision shortfall of Tk聽1,77,650 crore at the end of March 2025, with six of them facing such deficits for the first time, indicating a sharp deterioration in their financial health amid a mounting crisis of non-performing loans.
According to Bangladesh Bank data, this figure represents a significant escalation from December 2024, when 12 banks had a combined shortfall of Tk聽1,09,151 crore.
The crisis has rapidly intensified just six months earlier. In June 2024, the provision shortfall stood at Tk聽31,549 crore across 10 banks.
Six banks 鈥� First Security Islami Bank, Union Bank, Premier Bank, United Commercial Bank, NRBC Bank, and NRB Bank 鈥� reported provision shortfalls for the first time.
The provision shortfall indicates the gap between what banks are required to set aside as a buffer against default loans and what they actually hold.
With surging loan defaults, many banks are now unable to maintain these regulatory cushions, bankers said.
Janata Bank emerged as the worst-hit state-owned lender in this regard.
Its provision shortfall ballooned to Tk聽44,325 crore in March 2025, up from zero in June 2024.
This was triggered by a massive rise in its classified loans, which soared to Tk聽70,845.68 crore, amounting to 75 per cent of its total outstanding loans.
A key reason behind Janata鈥檚 collapse is its largest client Beximco Group, which defaulted on Tk聽25,000 crore in loans.
National Bank reported the second-highest shortfall of Tk聽21,921 crore in March, up from Tk聽20,929 crore in June 2024. Its defaulted loans stood at Tk聽27,351.85 crore, up significantly from the previous year.
IFIC Bank, which was under the influence of controversial businessman and political figure Salman F Rahman, reported a provision shortfall of Tk聽18,918 crore in March, more than doubling from Tk聽7,886 crore in December.
Among other severely impacted banks, Islami Bank Bangladesh had a shortfall of Tk聽16,477 crore, First Security Islami Bank Tk聽15,271 crore, Union Bank Tk聽14,264 crore, and Social Islami Bank Tk聽10,571 crore 鈥� all previously under the control of the controversial S Alam Group.
State-run Agrani Bank recorded a shortfall of Tk聽10,031 crore, Rupali Bank Tk聽7,965 crore, and BASIC Bank Tk聽5,315 crore.
Private banks UCB, NRBC, Bangladesh Commerce Bank, Dhaka Bank, NRB Bank, and Standard Bank also faced significant deficits, with respective shortfalls of Tk聽2,643 crore, Tk聽717 crore, Tk聽585 crore, Tk聽575 crore, Tk聽543 crore, and Tk聽512 crore.
Beyond the 17 banks in deficit, an additional 20 banks reported zero shortfall or surplus, largely due to deferral facilities granted by Bangladesh Bank.
These banks, however, were not permitted to distribute dividends for 2024, highlighting the overall fragility of the banking sector.
Provisions are typically drawn from bank profits, but widespread loan defaults have eaten into earnings, leaving banks unable to comply with regulatory mandates.
Bangladesh Bank data shows the country鈥檚 total non-performing loans nearly doubled over the year, reaching Tk聽4.20 lakh crore in March 2025 from Tk聽1.82 lakh crore a year earlier.
Experts said that a massive amount of NPLs surfaced after the central bank had begun revealing the actual financial condition of banks following the ouster of authoritarian Awami League regime under which politically connected large bank borrowers had enjoyed undue privileges and regulatory leniency.
They said that the crisis is the result of years of unchecked loan irregularities, corruption, and regulatory failures during the Sheikh Hasina rules.