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The volume of non-performing loans (NPLs) in Bangladesh’s banking sector has crossed the Tk 6 lakh crore mark, with a significant portion concentrated in a handful of banks, according to Bangladesh Bank data.
At the end of June 2026, the 10 banks with the highest levels of defaulted loans collectively accounted for around Tk 4 lakh 39 thousand 412 crore, highlighting the severe concentration of distressed assets within the banking system.
Islami Bank Bangladesh PLC had the highest amount of non-performing loans, at around Tk 98,915 crore. State-owned Janata Bank ranked second with Tk 75,729 crore, while First Security Islami Bank had Tk 60,645 crore in NPLs.
The three banks together accounted for around Tk 2 lakh 35 thousand 289 crore in bad loans — equivalent to 53.5 per cent of the total held by the top 10 banks.
Islami Bank’s NPLs stood at Tk 94,322 crore at the end of last year, which was then the highest amount of defaulted loans ever recorded by a single bank in Bangladesh. The figure has increased by nearly Tk 4,600 crore in just six months, reaching approximately Tk 98,915 crore by June.
The bank has also faced acute liquidity pressure during the same period. Bangladesh Bank provided liquidity support to Islami Bank in several phases in June. At one point, the central bank provided a total of Tk 6,500 crore to the bank over three days to help address its liquidity needs.
After the top three, EXIM Bank ranked fourth with Tk 38,053 crore in non-performing loans.
The other banks among the top 10 were Agrani Bank with Tk 32,133 crore, Social Islami Bank with Tk 29,799 crore, IFIC Bank with Tk 28,520 crore, National Bank with Tk 28,158 crore, Union Bank with Tk 27,134 crore and AB Bank with Tk 20,326 crore.
The figures indicate that the problem extends well beyond a few troubled institutions and has become a major concern across the banking sector.
According to Bangladesh Bank data, total NPLs in the country’s banking system reached Tk 6 lakh 6 thousand 555 crore at the end of June. This means 32.78 per cent of the banking sector’s total outstanding loans had become non-performing.
The volume of bad loans increased by Tk 17,851 crore in just three months compared with March, further underscoring the deterioration in asset quality.
Economists and banking-sector analysts have raised concerns over the concentration of bad loans in a small number of banks, pointing to possible weaknesses in loan approval, excessive exposure to large borrowers and inadequate monitoring of loan utilisation and recovery.
Dr Zahid Hossain, former lead economist of the World Bank’s Dhaka office, said it was important to investigate who had taken the loans, what collateral had been accepted against them and where the borrowed funds had ultimately gone.
He said rising NPLs would increase pressure on banks’ provisioning requirements and capital positions.
“The impact will be felt by depositors, banks’ liquidity and overall financial stability,” he said.
The continued rise in defaulted loans also poses a challenge to the banking sector’s ability to extend fresh credit, as banks have to set aside larger provisions against bad assets. A sustained deterioration in asset quality could further weaken the capital base of vulnerable banks and increase pressure on the broader financial system.
The concentration of a large share of bad loans in a limited number of banks also raises questions about the effectiveness of credit-risk assessment, corporate governance and recovery mechanisms in those institutions.