State-owned banks face 1.88 trillion taka in defaulted loans as Finance Minister outlines fiscal challenges

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Finance Minister Amir Khasru Mahmud Chowdhury has disclosed that nine state-owned banks are grappling with a combined default loan portfolio of 188,701.75 crore taka. According to data submitted to the CIB database as of May 31, the affected institutions include Agrani, Janata, Rupali, Sonali, Basic, Bangladesh Development, Krishi, Rajshahi Krishi Unnayan, and Probashi Kallyan Bank.

Addressing the national parliament, the Finance Minister also provided a detailed breakdown of expenditures linked to the commemoration of the “Mujib Year.” He reported that 43 ministries and divisions spent a total of 982.91 crore taka on various initiatives, including the construction of statues, plaques, and digital countdown clocks. The Local Government Division led this spending with 283.15 crore taka, followed by the Ministry of Railways at 206.73 crore taka. When questioned about a potential audit of these expenses, the Minister noted that while no formal decision has been made, the government is systematically reviewing all historical expenditures across various sectors.

Regarding the country’s broader fiscal position, the Minister stated that Bangladesh’s total debt reached 2.20 trillion taka by the end of December. This figure comprises 959,311 crore taka in foreign debt and 1.24 trillion taka in domestic obligations. For the 2025-26 fiscal year, the government has already serviced 4.65 billion dollars in foreign debt, split between 3 billion dollars in principal and 1.65 billion dollars in interest payments.

The Finance Minister further addressed systemic issues in the stock market, noting that the Bangladesh Securities and Exchange Commission (BSEC) has imposed fines totaling 1,497 crore taka against individuals and entities involved in market manipulation and financial irregularities. Notably, 428 crore taka of these penalties were linked to Beximco share manipulation. The regulator is also pursuing enforcement actions against ABG Ltd regarding its acquisition of shares in the Chittagong Stock Exchange and has revoked the trading licenses of several brokerage houses, including Tamha, Banco, Crest, and Mashiur Securities, for misappropriating investor funds.

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In response to concerns regarding market health, the Minister emphasized that the BSEC has seen significant progress since its reconstitution, noting that the stock market has experienced more growth in the last two months than in the previous five years. He added that the government remains committed to prosecuting those who laundered public funds abroad, asserting that there will be no compromise in holding economic offenders accountable.

Supporting the agricultural sector and new entrepreneurs, the government has initiated a waiver for small agricultural loans, covering 1,352.74 crore taka in debt for over 1.43 million farmers. Additionally, the central bank has expanded its refinancing scheme for cottage, micro, and small enterprises from 100 crore to 500 crore taka, offering new entrepreneurs collateral-free loans of up to 10 lakh taka at a seven percent interest rate.