Bangladesh’s banking sector has reached a point where growth alone no longer matters, as years of governance failures, loan scams and eroding discipline shift the real test to credibility and public trust in a fragile environment.
The assessment was made by SBAC Bank Chairman Md Moklesur Rahman in an interview with TIMES of Bangladesh’s Takie Mohammad Jubayer on Tuesday.
For the fourth-generation lender, which has just completed 13 years, that reality is shaping strategy, with the bank deliberately avoiding aggressive expansion and instead focusing on compliance, liquidity strength and consistent service.
Rahman said the approach sets SBAC apart in a trust-starved sector, as he reflected on the bank’s journey and outlined his views on reforms, central bank policy, economic risks and restoring discipline in the financial system.
At the centre of SBAC’s story, he says, is a quiet but critical achievement.
Over the past 13 years, the bank has built its foundation on strict compliance across all regulatory indicators, without exception. In today’s banking environment, he argues, compliance is no longer just a requirement – it is a competitive edge, as it directly drives customer confidence.
That confidence is now visible in behaviour.
New clients are moving from other banks, while existing customers continue to rely on SBAC without hesitation.
The bank’s conservative lending approach has ensured that it maintains adequate liquidity at all times, with an advance-deposit ratio of around 82 per cent and surplus liquidity of over Tk1,400 crore. As of 31 March, the bank’s deposits exceeded Tk11,000 crore.
This liquidity buffer – effectively a safety cushion – allows the bank to withstand sudden withdrawal pressure, reinforcing trust among depositors of all sizes.
At the same time, Rahman stresses that this stability is driven not just by policy but by people.
He describes employees as the bank’s core strength, adding that SBAC has prioritised competitive pay, career growth and a supportive work environment to build a motivated workforce for sustained growth.
Looking ahead, he acknowledges that the next phase will be more demanding.
The bank aims to enter the country’s top 10, a target that will depend on delivering innovative services, ensuring the secure use of technology and maintaining strong governance standards.
Crucially, he notes, SBAC’s management operates independently, with minimal board interference – a structure he sees as essential for professional banking.
From the institution, Rahman shifts to the system.
He believes the sector’s success will depend less on announcing reforms and more on enforcing them consistently.
Policy continuity, transparency and predictability are now critical, he argues.
The new government and central bank leadership have a clear opportunity to signal that discipline and governance will guide the sector, noting that meaningful change often begins quietly but must be sustained through steady action.
At the same time, Rahman flags three immediate risks: a deficit of trust, weak asset quality – particularly non-performing loans – and external shocks from global energy prices, dollar pressure and geopolitical uncertainty.
These risks, he says, are closely interconnected.
Weak confidence distorts depositor and investor behaviour, while external pressures raise costs and strain repayment capacity, feeding back into the banking system.
In this context, the central bank’s role becomes critical.
Moklesur Rahman sees the regulator not just as a policymaker but as a stabilising anchor. Clear communication, data-driven decisions and consistent enforcement across institutions are, in his view, key to rebuilding trust.
He stresses coordination over confrontation, with a focus on institutional strength.
On monetary policy, he cautions against treating inflation control and growth as competing goals.
Sustainable growth requires price stability, he argues, but interest rates alone cannot fix structural weaknesses.
Energy security, infrastructure and supply chain efficiency remain more decisive for business decisions.
The ongoing Middle East crisis adds a fresh layer of uncertainty.
Rising energy prices, higher import costs and potential disruptions to remittance flows could intensify inflation and strain external balances. In this environment, Rahman says banks must act early.
Preparation, not passivity, is key.
Banks need to reassess sectoral exposure, closely track import-dependent clients, strengthen liquidity and capital buffers, and stay engaged with customers.
“A bank that explains builds more trust than one that stays silent,” he said.
Turning to reforms, Rahman makes it clear that governance must move beyond rhetoric.
Real reform, he argues, depends on consistent enforcement – accountability at the board level, discipline in loan approvals and tight control over related-party transactions.
At SBAC, he notes, a clear separation between board and management ensures professional decision-making without undue influence.
On non-performing loans, his stance is equally structured.
Recovery requires systems, not sentiment. Faster legal resolution, visible accountability for wilful defaulters and credible restructuring mechanisms are essential.
He also flags a deeper problem in the business culture.
Many borrowers, he says, enter ventures without properly assessing cash flow, while fund diversion remains a major driver of default. Without strict oversight, this weakens the entire credit culture.
SBAC maintains close monitoring to ensure loan funds are used as intended, he adds.
Only through consistent governance, firm enforcement and disciplined growth, Rahman concludes, can Bangladesh’s banking system rebuild trust and move towards lasting stability.
