Bangladesh’s financial sector is under strain, raising concerns over transparency, governance, and the credibility of financial reporting, according to the Financial Reporting Council (FRC) Bangladesh. Financial statements often failed to reflect the true condition of institutions, showing weak disclosure of bad assets, inadequate provisioning, concentrated lending, related-party exposure, and liquidity stress.
The observations were presented at the Financial Accounting and Reporting (FAR) Summit 2026 held on Wednesday. The summit was organised by FRC in collaboration with the Institute of Chartered Accountants of Bangladesh and the Institute of Cost and Management Accountants of Bangladesh at a hotel in Dhaka.
The report highlighted recurring issues including overstated or inadequately assessed asset values, delayed recognition of non-performing loans, gaps in provisioning, unclear disclosure of related-party transactions, and aggressive accounting assumptions masking financial stress. Explanations of key risks and uncertainties were often inadequate. Regulatory responses were fragmented or delayed due to information gaps, allowing systemic vulnerabilities to build over time.
FRC Chairman Dr Md Sajjad Hossain Bhuiyan said the council is transitioning from a traditional regulator to “an active guardian of financial integrity.” He added that FRC would enforce a comprehensive reconciliation of total bank deposits and require explanations for all transactions alongside IFRS disclosures to ensure liabilities and non-performing loans are never hidden.
Finance Minister Amir Khosru Mahmud Chowdhury warned the country’s future depends on the strength of its financial institutions. “When financial reporting is weak, banks allocate credit based on distorted information, inefficient businesses receive funding, and the effective tax base shrinks,” he said. He added that aggressive accounting must end to protect the banking sector and ensure GDP growth is built on genuine strength.
Prime Minister’s Finance Adviser Rashed Al Mahmud Titumir declared a zero-tolerance policy against fraudulent financial reporting. “Auditors, valuers, accountants, and other professionals involved in manipulated accounts will face legal action,” he said. He stressed that audit firms must not act as “documents or accomplices” of clients, noting that weak regulation and falsified reports had distorted the business environment, giving dishonest firms unfair advantages while genuine entrepreneurs suffered.
BGMEA President Mahmud Hasan Khan said reliable financial reporting is critical for the ready-made garment sector. “When financial statements fail to reflect economic reality, the cost of borrowing increases for everyone,” he said.
BTMA Vice-President and MP Md Abul Kalam said false reporting in textiles undermines credit for viable enterprises. “Weak financial reporting drives share prices away from their real value, which is deeply concerning,” he added.
