At least 11 private commercial banks (PCBs) in Bangladesh face financial vulnerability due to poor liquidity management and weak corporate governance, leading to aggressive lending and increased classified loans. These banks, including Islami Bank, Social Islami Bank, and National Bank, have exceeded their deposit levels in loans and advances, violating banking regulations. Some have relied on borrowed capital from the central bank to sustain operations, raising concerns about fund mismanagement. NPLs from these troubled banks amounted to Tk 478.73 billion by mid-2024, representing a significant portion of the banking sector’s total bad loans. The reconstituted boards of these banks are focusing on recovery efforts and deposit mobilization, with some showing signs of improvement. However, experts recommend appointing external auditors for asset quality assessments, enforcing legal actions against responsible officials, and strengthening recovery measures to mitigate the ongoing risks in the banking system.
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