Dhaka:Bangladesh Bank (BB) is executing a series of reforms aimed at restoring stability in the banking sector, with expected improvements in banks' financial conditions by March-April 2027.
According to Bangladesh Sangbad Sangstha, BB Deputy Governor Dr. Md Habibur Rahman highlighted the central bank's focus on controlling non-performing loans, assessing asset quality, addressing capital shortfalls, and improving risk management at the 11th Annual Banking Conference 2026. The conference was organized by the Bangladesh Institute of Bank Management (BIBM).
Dr. Rahman emphasized the need to rebuild foreign exchange reserves, settle outstanding external liabilities, and maintain exchange rate stability. He noted that foreign exchange reserves now cover nearly six months of import expenditure. The central bank has completed asset quality reviews in 15 banks and is working with the World Bank to assess the remaining banks.
The non-performing loan ratio has decreased from 36 percent in December 2025 to 31 percent, with further declines hoped for by the end of the year. New legislation, such as the Money Loan Court Act and the Special Asset Management Act, aims to expedite the recovery of defaulted loans.
Dr. Rahman also stressed the importance of independent decision-making by bank boards, accountability of management, and effective risk management. He urged banks to base lending decisions on borrowers' repayment capacity and realistic business prospects. Additionally, he called for stronger cybersecurity measures and the establishment of a 'Bank Restructuring and Resolution Fund.'
Plans include expanding technology use in banking, promoting cashless transactions, and introducing an inclusive payment system next year to facilitate person-to-person digital transactions. A Tk 60,000 crore package is also being implemented to support financial stability without causing inflationary pressures.
The deputy governor concluded by underscoring the importance of evidence-based policymaking and continuous monitoring to protect depositors' interests and ensure the banking sector's alignment with Bangladesh's economic potential.