The proposed Tk 7,97,000 crore budget for FY2024-25 offers no significant reforms for Bangladesh’s troubled banking sector, currently plagued by non-performing loans (NPLs) reaching a historic high of Tk 1,82,295 crore, or 11.10% of total outstanding loans. This marks a sharp increase from Tk 1,45,633 crore at the end of December 2023. Additionally, ten banks face a capital shortfall of Tk 39,655 crore.
Despite these challenges, Finance Minister defended borrowing from banks, a strategy planned to cover a Tk 2,56,000 crore budget deficit, with Tk 1,37,500 crore (2.5% of GDP) to be sourced domestically. Critics, such as Ahsan H Mansur of the Policy Research Institute of Bangladesh, argue that this will limit credit availability for the private sector and that the budget fails to address necessary banking sector reforms or the issues plaguing weak banks.
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