Bank rehabilitation to cost Tk 60,000cr a year

Bangladesh will require Tk 60,000 crore annually from the national budget for the next five to eight years to rehabilitate its banking sector after extensive financial plunder and structural damage, Bangladesh Bank Governor Mostaqur Rahman has said, disclosing that the central bank submitted a draft proposal to the government last week.

Speaking as chief guest at a campaign promoting Bangla QR transactions, organised by ONE Bank PLC at United International University (UIU) in Dhaka on Saturday (October 10), the governor said nearly one-third of the banking system’s total funds had been looted by the time he took office. Describing the scale of the alleged plunder as unprecedented, he remarked that the money could otherwise have financed family cards for two crore households or built two major infrastructure projects comparable to the Padma Bridge, whereas ordinary citizens were now shouldering the consequences. Addressing concerns over liquidity shortages and depositors’ difficulties in withdrawing their savings, he said Bangladesh Bank was extending the necessary liquidity support to struggling banks so that they could repay deposits. Furthermore, he stated that a merged bank had received full support and assured that all National Bank customers would be able to withdraw their deposits by October 15.

On loan defaults, the governor said borrowers and banks would have until December 31 this year to resolve outstanding issues through mutual negotiation; from 2027, however, the authorities would take stringent legal action against those who failed to comply. In addition, two laws are being amended, and anti-money laundering regulations tightened in order to recover looted assets and hold those responsible to account. The event also marked the launch of Bangla QR payment services on the UIU campus, designed to encourage digital transactions among students and reduce reliance on cash. ONE Bank Managing Director Muhit Rahman said interoperable digital payments would give students hands-on experience of modern financial services.

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Moreover, the governor argued that nationwide adoption of Bangla QR could enhance transaction transparency, help detect suspicious financial activity and lift Bangladesh’s tax-to-GDP ratio from below 7 per cent to more than 10 per cent. The programme was attended by UIU Vice-Chancellor Abul Kashem Mia, bank officials and more than 400 university students. Nevertheless, the success of the governor’s ambitious recovery plan will ultimately hinge on the government’s willingness to commit the substantial annual funding he has requested.