The banking system is the largest unbooked liability on the national balance sheet

Bangladesh 2036, chapter 2 of 10. Contents, sources and the five numbers.

The banking system is the largest unbooked liability on the national balance sheet

The single largest number in Bangladeshi economics is a definition change.

Bangladesh Bank reported a gross non performing loan ratio of 9.00 percent for December 2023 and 12.56 percent for June 2024. After the 2025 reclassification, which stopped excluding certain rescheduled and written off exposures, the ratio for end December 2025 is 30.6 percent. The World Bank series reads 9.57 percent for 2023 and 18.96 percent for 2024. Nothing in the loan book changed by twenty one points in twenty four months. The reporting rule did.

The distribution is where the fiscal risk sits. At June 2024 the state commercial banks carried a gross classified ratio of 32.77 percent against 7.94 percent for private commercial banks and 4.74 percent for foreign banks. Capital adequacy tells the same story: the industry stood at 10.64 percent, private banks at 12.29 percent and foreign banks at 39.46 percent, while state commercial banks stood at 5.44 percent. Four state banks and five private banks were below the minimum capital requirement, and two agricultural development banks failed it outright. Return on equity was minus 11.40 percent for state commercial banks against 8.75 percent for private banks and 19.33 percent for foreign banks. Provision maintenance was 69.64 percent at state banks against 80.18 percent at private banks.

The borrower count makes it concrete. At June 2024 there were 1,012,721 classified borrowers of banks and finance companies out of 7,593,820 bank borrowers, up from 938,822 a year earlier. The classified amount including written off loans reached 2,934.83 billion BDT at June 2024 from 2,257.78 billion a year earlier, a rise of 30 percent.

Recapitalising the state banks is a fiscal decision disguised as a supervisory one, and it competes directly with the interest bill described above.

The system is also shrinking relative to the economy it serves. Bank deposits fell from 43.70 percent of GDP in 2020 to 37.89 percent in 2024. Domestic credit to the private sector from all lenders fell from 39.16 percent of GDP in 2020 to 35.81 percent in 2024 and 34.50 percent in 2025. Liquid reserves to assets fell from 11.47 percent in 2017 to 7.46 percent in 2024. Banks now hold 4,034.89 billion BDT of treasury securities, 15.88 percent of their 25,412.76 billion BDT of assets, which is the state's financing need showing up as a crowding out of private borrowers.

One reform has landed. The Deposit Protection Act 2026, Act 75 of 2026, assented on 10 April 2026, raises the insured ceiling from 100,000 to 200,000 BDT, about 1,629 USD at the May 2026 rate, extends cover to finance companies and targets settlement within seventeen working days. The ceiling rests on the government's own announcement rather than on a gazette copy that could be opened, which is itself a small example of the larger problem in section thirteen.

Prices and the taka broke three times, and only two breaks are documented

Inflation stopped being a shock and became a regime.

National CPI inflation averaged between 5.44 and 6.15 percent in every year from FY17 to FY22. It reached 9.02 percent in FY23 and a twelve month average of 9.73 percent by June 2024, against a budget target of 6.00 percent later revised to 7.50. The World Bank annual series reads 9.88 percent for 2023, 10.47 percent for 2024 and 8.77 percent for 2025. The IMF places FY25 at 10.0 percent, projects 9.2 percent for FY26 and 6.0 percent for FY27. Three completed fiscal years near or above 9 percent, with a projected fourth, is a regime.

Bangladesh Bank changed framework in the middle of it. The interest rate corridor was introduced on 1 July 2023 and narrowed to plus or minus 150 basis points on 21 January 2024. The policy rate was raised five times in FY24 for a cumulative 250 basis points to 8.50 percent. The standing lending facility went to 10.00 percent and the standing deposit facility to 7.00 percent effective 9 May 2024, and the overnight policy rate went to 10.00 percent from 9.50 effective 27 October 2024. The SMART lending formula was withdrawn on 8 May 2024.

Savers still lost. The weighted average deposit rate rose from 6.06 percent in FY23 to 9.08 percent in FY24, which against the 9.73 percent twelve month average inflation of June 2024 is a real deposit rate of minus 0.65 points, narrowed from minus 2.96 the year before. The weighted average advance rate rose from 7.31 to 11.52 percent, so the real lending rate turned positive while the real deposit rate did not. The spread widened from 2.93 percent in June 2023 to 6.03 percent in June 2024. National savings certificates paid between 11.04 and 11.76 percent from 14 January 2024, above both the deposit rate and the old nine percent lending cap, which tells the deposit market exactly where the state has set the floor.

The corridor arrived after the inflation did. Real deposit rates were negative for four straight years, 2021 to 2024, bottoming at minus 3.4 points in 2023, which is why deposits fell six points of GDP while the policy rate doubled.

The exchange rate broke on a date. The taka was held at 110.5 per USD in October and November 2023 and 110.0 from December 2023 through April 2024. On 8 May 2024 Bangladesh Bank introduced a crawling peg with a mid rate of 117.00 per USD. The rate reached 117.7 in May 2024, 120.0 in August 2024, 122.9 in May 2025, 122.3 in December 2025 and 122.75 in May 2026, and the September 2026 snapshot reads 122.60. A dollar now costs 42.9 percent more taka than the 85.8 of December 2021, which is a 30.0 percent loss in the taka's dollar value.

The 8 May 2024 line is the single most consequential date in the recent monetary record, and the move from that crawling peg to a market clearing rate is still not documented in any source held locally.

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Sources for every figure in this chapter are listed on the contents page and in the series source ledger.