In a major financial intervention, the government has allocated Tk40,000 crore in the proposed national budget for FY 2026-27 to stabilise struggling banks and non-bank financial institutions (NBFIs).
The massive fund aims to recapitalise weak commercial banks and NBFIs facing liquidity shortages, rising non-performing loans (NPLs), and declining capital adequacy.
Finance ministry sources said the allocation will be used to inject fresh capital, support liquidity frameworks, and restore public confidence in the financial system. Economists describe it as one of the largest state-backed banking rescue efforts in the country’s history.
Recent assessments by Bangladesh Bank have flagged several commercial banks, particularly state-owned and some private Islami banks, as highly vulnerable. NPLs have surged in the sector over the past two years, reducing the system-wide Capital Adequacy Ratio to critical levels and limiting lending capacity for weaker institutions.
While operational details are still being finalised, the proposed framework envisages a phased recapitalisation plan. Funds will be channelled through Bangladesh Bank to provide targeted capital injections and emergency liquidity support to banks identified as “weak.”
“The fundamental goal is to protect ordinary depositors and prevent a systemic collapse of the financial sector,” the finance minister stated during the budget presentation.
The budget document also emphasises strict conditionalities attached to the support, including institutional restructuring and aggressive loan recovery targets, ensuring that public funds are used effectively to stabilise the sector and safeguard the economy.
