The Advance-Deposit Ratio of 14 banks remained above the regulatory limit as of June this year due to lenient regulatory approach.
Such overexposure comes amid a backdrop of liquidity shortages, governance lapses, scams and persistent non-performing loans, which experts said severely undermined depositor confidence and triggered broader systemic risks, financial experts said.
The ADR means the proportion of loans (excluding Export Development Fund and refinancing) disbursed by a bank against its total deposits including interbank surplus.
The central bank fixes the ratio with a view to minimise the risk to the depositors鈥� funds.
To manage liquidity risk, Bangladesh Bank has set a ceiling of 87 per cent for conventional banks and 92 per cent for Shariah-based banks.
It means conventional banks will be able to disburse Tk 87 as loans against every Tk 100 deposit while Shariah-based banks Tk 92.
ADR of seven banks crossed 100 per cent, which means that loans outpaced deposits and are being financed through borrowed funds or short-term interbank borrowing.
Among the violators, First Security Islami Bank is the most severely exposed, with a staggering ADR of 136.25 per cent, according to Bangladesh Bank data.
As of March, 2025, the bank had loans amounting to Tk聽60,901 crore compared with deposits of Tk聽44,640 crore.
Social Islami Bank reported an ADR of 126.35 per cent followed by EXIM Bank 124.15 per cent, National Bank 118.84 per cent, Union Bank 118.23 per cent, Global Islami Bank 115 per cent and Islami Bank Bangladesh, 100.79 per cent as of June this year, BB data showed.
In addition, the ADR of Bangladesh Commerce Bank (Islamic wing), BASIC Bank, AB Bank, Premier Bank (Islamic wing), Janata Bank, and Standard Bank still remain beyond the allowable limit.
Padma Bank, IFIC Bank and United Commercial Bank have narrowly avoided breaching the ADR cap with the ratio reaching 84.72 per cent, 85.82 per cent and 85.47 per cent respectively.
It indicated that they are close to breaching the threshold and may soon follow the others into risky territory unless corrective action is taken.
Some of the banks faced difficulties in meeting depositor withdrawal demands in recent months due to their thin liquidity positions and mismatches between loans and deposits.
The central bank had previously attempted to tighten control by capping ADRs at 85 per cent for conventional banks and 90 per cent for Islamic banks.
However, under pressure from politically connected bank owners, Bangladesh Bank in 2020 relaxed the ADR ceiling 鈥� raising it to 87 per cent and 92 per cent respectively.
Such regulatory approach encouraged some banks to operate recklessly and ignore prudent lending practices.
As a result, banks have become increasingly reliant on emergency funding from the central bank and short-term market borrowing.
The non-performing loan figure has nearly doubled in a year, climbing to Tk聽4.20 lakh crore in March 2025 from Tk 1.82 lakh crore in March 2024, according to the BB data.
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.