Bangladesh’s banking sector is facing a major crisis of corruption involving bank managers and directors. Recent data reveals that the total amount of loans taken by bank directors has surged to Tk 2.33 lakh crore as of August 20, up from Tk 90,000 crore in 2016—an increase of nearly 160% in eight years. Directors are circumventing regulations by securing large loans from other banks through collusion, while also benefiting from loan waivers and using proxy companies.
The central bank’s strict regulations against self-lending have led directors to exploit connections, accumulating significant debts and defaulting on loans. For instance, private sector Islamic banks and major public banks have been heavily involved in these practices. Defaulted loans in the sector exceed Tk 1.31 lakh crore, with bank managers accounting for Tk 757 crore of this amount.
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