The central bank of Bangladesh has quietly extended a Tk1,500 crore emergency loan to privately-owned AB Bank, throwing a lifeline to an institution now struggling to meet depositors’ withdrawals and settle large corporate dues.
The 90-day liquidity support, approved by Bangladesh Bank Governor Ahsan H Mansur on November 16, carries an interest rate of 11.50 percent. The money was credited the same day to AB Bank’s account at the central bank’s Motijheel office after the lender submitted its promissory note.
This fresh injection comes on top of Tk780 crore that AB Bank had already borrowed in three phases, of which it has repaid only Tk10 crore. In total, the bank now owes the central bank Tk2,270 crore – a scale of dependence that underlines how severely the institution has deteriorated in recent months.
According to documents, AB Bank is facing an acute run on deposits. Customers have withdrawn Tk842 crore since September, according to internal records, while the bank’s clearing account at Bangladesh Bank holds just Tk6.42 crore – an amount so low that branches often cannot honour withdrawal requests.
Managing Director Syed Mizanur Rahman warned in a written submission to the governor that the liquidity shortfall has created “panic among depositors and employees” and left branches facing a risk of “severe unrest.”
According to board records of the bank, the crisis has also trapped more than Tk2,000 crore belonging to state and private entities. These include Tk202 crore of the Bangladesh Power Development Board, Tk35 crore of Palli Bidyut Samiti, Tk378 crore of Bangladesh Krishi Bank, Tk1,307 crore of ASA Bangladesh, Tk6 crore of West Zone Power Development, Tk13 crore of DPDC, Tk12 crore of Bangladesh Gas Fields, Tk27 crore of DESCO, and Tk9 crore of North-West Power Generation Company.
The bank has even failed to settle a Tk528 crore letter of credit of Bangladesh Petroleum Corporation.
AB Bank had earlier sought a massive Tk6,000 crore fund from the central bank in a meeting with the governor on November 3 to keep day-to-day operations afloat.
Its board later approved a request for Tk 2,500 crore in instant liquidity support on November 12, following which AB Bank Chairman Kaiser A Chowdhury and its Managing Director Syed Mizanur Rahman formally appealed to the governor.
These developments mark a dramatic fall for Bangladesh’s first private commercial bank, which began operations on April 12, 1982, and listed on the Dhaka Stock Exchange the following year. Once celebrated for service quality and customer acquisition, AB Bank has been crippled by years of top-level corruption, reckless insider lending, and predatory enrichment by sponsor-directors.
The bank’s financial statements paint a grim picture. By September, non-performing loans had surged to Tk 30,143 crore – roughly 84 percent of total outstanding loans – with 56 percent concentrated among its top 20 borrowers.
After years of plunder, the bank posted a record loss in 2024: Tk21.28 loss per share and a consolidated annual loss of Tk1,906 crore, a collapse from its Tk90 crore profit in 2023.
