Bangladesh’s banking sector faces an intensifying crisis as total non-performing loans (NPLs) have breached the ৳6tn mark, with default risks dangerously concentrated amongst a handful of major lenders. Data released by Bangladesh Bank reveals that the top ten defaulted banks collectively accumulated ৳439.41bn (£28.2bn) in bad loans by the end of June 2026. This stark tally underscores systemic vulnerabilities that threaten the broader financial ecosystem.
Islami Bank Bangladesh leads the default figures with ৳98.92bn in bad debt, up from its record-setting ৳94.32bn at the close of last year. State-owned Janata Bank ranks second with ৳75.73bn, followed by First Security Islami Bank at ৳60.65bn. Together, these three institutions account for ৳235.29bn—representing 53.5 per cent of the total defaulted loans held by the top ten banks.
Parallel to its bad loan burden, Islami Bank has grappled with severe liquidity deficits. The central bank intervened repeatedly throughout June, disbursing emergency liquidity support that included ৳65bn injected over a brief three-day window.
The structural distress extends beyond the top three lenders. EXIM Bank follows with ৳38.05bn in defaulted debt, Agrani Bank at ৳32.13bn, and Social Islami Bank at ৳29.80bn. Completing the top ten are IFIC Bank (৳28.52bn), National Bank (৳28.16bn), Union Bank (৳27.13bn), and AB Bank (৳20.33bn).
| Bank Name | Defaulted Loans (BDT in Billions) | Market Position / Category |
| Islami Bank Bangladesh | 989.15 | Largest Defaulting Lender |
| Janata Bank | 757.29 | State-Owned Commercial Bank |
| First Security Islami Bank | 606.45 | Private Shariah-Based Lender |
| EXIM Bank | 380.53 | Private Commercial Bank |
| Agrani Bank | 321.33 | State-Owned Commercial Bank |
| Social Islami Bank | 297.99 | Private Shariah-Based Lender |
| IFIC Bank | 285.20 | Private Commercial Bank |
| National Bank | 281.58 | Private Commercial Bank |
| Union Bank | 271.34 | Private Shariah-Based Lender |
| AB Bank | 203.26 | Private Commercial Bank |
At the national level, overall defaulted loans stood at ৳606.56bn by late June, constituting 32.78 per cent of total disbursed credit across the banking sector. The total surged by ৳178.51bn within the second quarter alone, signaling accelerated asset deterioration.
Financial analysts warn that such heavy concentration of distressed loans highlights governance flaws, flawed credit assessment practices, and an over-reliance on large single borrowers. Dr Zahid Hussain, former lead economist at the World Bank’s Dhaka office, stressed the need for an immediate audit into collateral valuations, loan distribution processes, and the final destination of sanctioned funds. Left unaddressed, soaring defaults will deepen provisioning deficits, erode capital adequacy, and jeopardise liquidity and public faith in the banking framework.
