The Dhaka Chamber of Commerce & Industry (DCCI) has expressed concern over Bangladesh Bank’s continued contractionary monetary policy, which has contributed to a dramatic slowdown in private sector credit growth.
The latest data reveals that private sector credit growth fell to just 6.4% in June 2025, the lowest in 22 years, signaling weak investment and industrial activities.
The DCCI notes that this downturn in credit growth is further exacerbated by broader uncertainties in the business environment, including an unstable law and order situation, limited energy supply, and the ongoing tightening of the monetary policy by Bangladesh Bank.
The rising non-performing loans (NPLs), which reached Tk5.3 lakh crore, now account for over 27.09% of total outstanding loans, posing a serious threat to financial stability and eroding investor confidence.
Despite the declining business confidence, the policy rate remains unchanged at 10% in an effort to combat inflation. Although inflation has only marginally decreased, this persistently high policy rate continues to burden borrowers, particularly in the CMSME and productive sectors.
The private sector credit growth target for the next six months has been set at 7.2%, down from 9.8% in the previous policy, reflecting the shrinking credit flow and the increasing difficulty for businesses to sustain operations.
Meanwhile, the government has raised the public sector credit growth target to 20.4%, which is expected to create additional fiscal pressure on the economy and taxpayers, further limiting credit availability for the private sector and contributing to economic slowdown.
In light of these challenges, the DCCI has urged Bangladesh Bank to enhance credit flow to businesses by simplifying loan terms and lowering interest rates. The Chamber also recommends extending the loan classification timeline by six months to support good borrowers in recovery without immediate default risk.
To ensure a sustainable economic recovery, the DCCI has called for urgent structural reforms in the financial sector, greater transparency in credit allocation, and strict monitoring to ensure adequate liquidity.
A more flexible, inclusive, and sector-responsive monetary policy, aligned with fiscal discipline, is essential to restore confidence, spur investment, and maintain macroeconomic stability in the coming months.