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Finance minister Amir Khosru Mahmud Chowdhury says many of the country's banks are caught in a “serious capital deficit”, the result of years of money laundering and loan defaults engineered through collusion between boards and management.
The minister made the remarks at the Financial Accounting and Reporting (FAR) Summit 2026 at a hotel in Dhaka on Wednesday.
Addressing the auditors and accountants in attendance, he noted that a massive capital deficit has emerged in the private sector, affecting both banks and previously successful companies.
The veteran leader pointed out that money laundering, misrepresentation of data and insider collusion -- where board members took away money in the name of bank ownership -- are the primary drivers behind this banking crisis.
The Financial Reporting Council (FRC) Bangladesh, the Institute of Chartered Accountants of Bangladesh (ICAB) and the Institute of Cost and Management Accountants of Bangladesh (ICMAB) jointly organised the summit to introduce landmark changes to corporate governance and macroeconomic stability.
The finance minister heavily criticised the FRC for failing to reflect these financial irregularities and money laundering operations in corporate financial statements.
He said, "The FRC was established in August 2015. It is now 2026, so we are 11 years on. I do not know what role the FRC played in the years gone by.
"I am surprised at the kind of financial indiscipline that has taken hold in Bangladesh -- not just in the banking sector but across the board.
“Because of this lack of financial discipline, money has been siphoned out of banks, and companies have got themselves listed on the stock market through false representation."
According to him, this climate is shutting sound companies out of the capital market. "When this kind of picture emerges, fundamentally good companies that can offer quality shares find no room in such a market.
“Nobody wants to compete in an uneven competition. Everyone wants a fair playing field."
BGMEA President Mahmud Hasan Khan Babu weighed in with a stark illustration of what poor financial reporting does to businesses, pointing to the steady fall in the number of registered garment exporters.
Membership has dropped from 7,200 to between 2,500 and 2,550, he said. "These businesses shut down because they lacked proper accounting and financial reporting.
He warned that companies padding their books with inflated and fabricated reports are only putting off the inevitable.
"Sooner or later, the business will collapse." Buyers, he added, only want to work with exporters whose accounting is transparent.