Non-performing loans (NPLs) accounted for roughly one-third of outstanding bank loans as of June 2026, BIBM Director General Md Ezazul Islam said at the 11th Annual Banking Conference 2026 on Thursday.
Addressing the inaugural session at the BIBM Auditorium in Dhaka, he noted that governance failures, capital and provisioning shortfalls, money laundering and productivity constraints continue to weaken the sector.
He highlighted a structural paradox- the coexistence of severe liquidity stress in some banks with substantial excess liquidity across the overall system. This, he said, demonstrates that rebuilding trust and directing funds towards viable investment matter just as much as the availability of funds.
Ezazul Islam called for a coordinated way forward. This includes stronger supervision, independent governance, transparent asset-quality reviews, effective recovery and resolution of distressed loans, adequate capital buffers and robust depositor protection. He stressed that while digital tools can support these reforms, technology must be matched by professional ethics, skilled people and institutional accountability.
The Director General also said that a healthier banking sector should ultimately expand responsible financing for productive businesses, agriculture and Cottage, Micro, Small and Medium Enterprises.
