Bangladesh’s banking sector is facing a severe capital crisis, with the overall capital-to-risk-weighted assets ratio (CRAR) plunging to 3.08 percent by the end of 2024—far below the Basel III requirement of 10 percent. The drop reflects years of unchecked irregularities under the Awami League government, with state-run, Islamic, and specialised banks suffering the most—recording negative CRARs of -8.42 percent, -4.95 percent, and -41.02 percent respectively. In contrast, private and foreign banks remain relatively stable. A surge in non-performing loans, which hit a record Tk 3,45,765 crore, has led to a capital shortfall of Tk 1,71,700 crore across 19 banks. Major defaulters include politically connected groups like Beximco, Anontex, and S Alam Group. Janata Bank alone faces a shortfall of Tk 52,890 crore. Bangladesh Bank attributes the crisis to unmasked loan defaults, provision shortfalls, and poor governance. Experts warn that recapitalisation must be tied to strict reforms to avoid rewarding mismanagement and ensure long-term financial stability.
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