Four Troubled Banks Hold Tk 3,000 Crore Export Fund

The launch of digital banks in Bangladesh remains stalled despite initial excitement. Nagad Digital Bank, the sole licensee, missed its December 2024 deadline to start operations due to regulatory delays. Bangladesh Bank received 56 applications, issued letters of intent to two companies, and licensed Nagad Digital Bank in June 2023 with a required Tk 1.25 billion in paid-up capital.

Chartered Life Insurance Company Limited, listed on the stock market, received a long-term credit rating of "AA-" and a short-term rating of "ST-2" from Alpha Credit Rating PLC, based on audited financial data as of December 31, 2023.

In May 2023, the government committed to appointing independent directors to state-owned banks, aiming for at least one-third representation on their boards to enhance governance and secure $500 million from the World Bank.

Thirteen business groups in Bangladesh defaulted on Tk 60,040 crore in loans from four state-owned banks: Sonali, Janata, Agrani, and Rupali. These loans violated single-borrower limits and contributed to Tk 116,537 crore in defaults as of September 2023.

As of September 2024, Beximco and S Alam Group top the defaulter list with defaulted loans of Tk23,120 crore and Tk11,734 crore, respectively. Together, they account for over 12% of the total defaulted loans, amounting to Tk2.84 lakh crore.

The interest rate gap between deposits and loans in Bangladesh has remained above 5% for 10 consecutive months, with the spread reaching 5.85% in November 2024, up from 2.93% in June 2023. While lending rates have sharply increased, deposit rates have not kept up, leaving depositors with returns lower than inflation (11.38% in November 2024).