In addition, loans worth another 3.18 lakh crore taka are on the verge of default. It is believed that political pressure played a role in granting these loans.
Published: September 23, 2025 8:23 AM IST
New Delhi: Bankrupt Bangladesh is facing worsening economic troubles with each passing day. In its assessment, the Asian Development Bank (ADB) said that Bangladesh’s economy is going through one of the most severe crises in its recent history. According to the ADB’s evaluation, all three pillars of the Bangladeshi economy—the banking sector, non-banking financial institutions (NBFIs), and the stock market—are in a state of instability.
The report further added that the country is in crisis due to defaulted loans, weak regulations, political influence, corruption, and shell companies. All these factors have pushed the economy into uncertainty, creating a looming crisis for its economic future, especially with national elections due next year.
The main reason behind Bangladesh’s deteriorating economic condition is decades of loose policies, political interference, and corruption. The country’s banking sector is burdened under the weight of defaulted loans.
As per the report, by the end of June 2025, the total defaulted loans in the country had reached 6 lakh crore taka. In addition, loans worth another 3.18 lakh crore taka are on the verge of default. It is believed that political pressure played a role in granting these loans. Bank officials engaged in corruption and distributed loans without proper documentation.
Here are some of the key details:
- According to a recent report by the Asian Development Bank (ADB), Bangladesh has become the country with the highest volume of defaulted loans in Asia.
- The institution stated that in 2024, 20.2 percent of Bangladesh’s total disbursed loans were declared defaults, which was 28 percent higher compared to the previous year.
- The ADB described Bangladesh as having the “weakest banking system” in Asia.
- According to the Dhaka Tribune, the instability in the banking sector is also affecting non-banking financial institutions (NBFIs).
- The situation in this sector is even worse than in the banking sector.
- According to Bangladesh Bank, the total defaulted loans of 20 troubled NBFIs stand at 21,462 crore taka, which amounts to 83 percent of their loan portfolio.
- To address this challenge, the country’s central bank has recommended the liquidation of nine of these institutions.
Former World Bank chief economist Dr. Zahid Hussain, after the release of the report, said, “The stricter the regulations, the higher the number of defaulted loans will be. Without bold reforms like those undertaken in India, this crisis will not end.”