The government will earmark Tk 600 billion annually in the fiscal budget for banking-sector recapitalisation, says Bangladesh Bank governor Md. Mostaqur Rahman.
“This is a piece of bad news for the next generation as they will not enjoy the benefits for their contributions to the economy,” he said Saturday.
“The future generations may have to bear the fiscal cost of recapitalising the banking sector for years to come.”
We are the generation that is leaving behind
“We are the generation that is leaving behind a system for the next generation… where they will do jobs, do business, and pay taxes, but won’t be able to enjoy the fruits of it because we have already consumed it,” the Governor said while speaking as chief guest at the fifth Bangladesh Economic Summit 2026 held at a local hotel.
The summit, styled roadmap for the economy amid global uncertainty, was organsied by vernacular daily Bonik Barta.
Bonik Barta Editor Dewan Hanif Mahmud was moderator at the programme while banking and representatives from major industrial sectors attended the function.
The governor said though the foreign-exchange reserves show
The governor said though the foreign-exchange reserves show some signs of stability, officials cautioned that systemic vulnerabilities — ranging from high inflation and elevated interest rates to heavy corporate lending concentration — pose deep-seated challenges for future economic sustainability.
The governor said that the high inflation remains closely intertwined with currency depreciation.
He mentioned that the past decade indicates that the local currency depreciated by roughly 60 per cent — averaging 6.0 per cent annually.
He said as a substantial portion of domestic manufacturing inputs relies on imports, exchange-rate depreciation rapidly transmits into consumer price inflation.
Although monetary policy remained tight as the high
“Although monetary policy remained tight as the high inflation has constrained the central bank’s capacity to aggressively lower interest rates”.
He, however, said that a policy rate had been reduced by 50 basis points recently, adding that there is an intention to lower further in coming days.
The Governor was critical of the concentration of lending to corporate bodies.
“Over the past decade, corporate lending surged to capture 70 per cent to 80 per cent of total credit portfolios”, the Governor said, adding it is a level far above sustainable norms for commercial banks.
He mentioned banks licences were issued for broader economic support.
He said that retail lending should be between
He said that retail lending should be between 20 per cent, SME Financing 35 per cent and corporate should be 45 per cent.
On the external front, the central bank governor said that efforts to shore up foreign reserves include the introduction of new financial instruments, such as the Non-Resident Convertible Taka Account (NRTA).
On bond, governor Mr Rahman said that they are working to lift 15-year maturity caps on select government bonds to extend holding periods and stabilise long-term dollar liquidity.
They are working on capital deficits and an overall contraction in domestic purchasing power.
MA Kashem, chairman of Southeast Bank PLC, ASM Shahidullah Khan, chairman of One Bank PLC, Tanjil Chowdhury, chairman of Prime Bank PLC, Abu Naser Bakhtiar, chairman of Agrani Bank PLC, Sk Masadul Alam Masud, founder-chairman of Bangladesh Steel Manufacturers Association and Mostafa Kamal, chairman and managing director of Meghna Group of Industries, among others, attended the programme.
