Half of banks in Bangladesh at risk of bankruptcy: ICCB president

International Chamber of Commerce Bangladesh (ICCB) President Mahbubur Rahman on Monday warned that nearly half of the banks in Bangladesh are on the verge of bankruptcy, raising serious concerns over the stability of the financial sector.

“Almost half of the country’s banks are in a situation where they could go bankrupt,” he said, noting that the risk extends to all state-owned banks as well. Despite this, no bank has formally entered bankruptcy proceedings due to weak enforcement of banking and insolvency laws, allowing troubled institutions to continue operating.

He pointed out that state-owned banks, due to their large size, carry significant liabilities, making the risks even more pronounced.

Mr Rahman made these remarks as a special guest at a pre-budget discussion organised by the Dhaka Chamber of Commerce and Industry at the InterContinental Dhaka.

Highlighting broader financial sector vulnerabilities, he said non-performing loans (NPLs) have already reached around 36 per cent and could rise further to 46 per cent. This, he warned, reflects deep-rooted weaknesses in the banking system.

The ICCB president stressed that such instability is undermining investor confidence and constraining economic growth.

He noted that businesses are already struggling to repay loans due to high interest rates, liquidity shortages and tightening credit conditions.

Mr Rahman also emphasised that policy inconsistency remains a major barrier to investment.

“An investment-friendly and predictable policy environment is essential,” he said, adding that both local and foreign investors need assurance that policies will remain stable over time.

Without such certainty, he cautioned, investment will remain sluggish, further exacerbating economic challenges.

He also flagged structural issues in the economy, including a persistently low tax-to-GDP ratio and an inequitable tax system that places a heavier burden on compliant taxpayers while leaving many outside the tax net.

Against the backdrop of global economic pressures, rising energy costs and supply chain disruptions, Mr Rahman called for a cautious and balanced budget, alongside urgent reforms in the banking sector to restore stability and investor confidence.

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