In a significant disclosure that underscores the deepening fragility of Bangladesh's banking sector, Finance Minister Amir Khasru Mahmud Chowdhury on Monday revealed in parliament that the country's total classified loans stood at a staggering Tk 5,44,831.88 crore as of December 31, 2025.
The announcement, made during a question-and-answer session in the Jatiya Sangsad, also included a list of the top 20 loan defaulters-many of them large corporate entities-raising fresh concerns about governance failures, regulatory weakness, and the growing burden on the financial system.
The disclosure came in response to a query from Hasnat Abdullah, who sought detailed information on the actual volume of defaulted loans, the identities of major defaulters, recovery measures, and the extent of loan defaults linked to sitting lawmakers and their affiliated entities.
Default Loans Reach Alarming Levels: According to the finance minister, the volume of classified loans in the banking sector has surged to over Tk 5.44 trillion, reflecting persistent weaknesses in credit discipline, poor loan recovery mechanisms, and alleged political interference in lending practices.
The minister also noted that an additional Tk 3,330.08 crore has not been classified as defaulted loans due to court orders, suggesting that the actual scale of financial stress could be even higher than reported.
Industry analysts, quoted by The Daily Industry, warned that such a large volume of non-performing loans (NPLs) poses “systemic risks” to the banking sector, constraining its ability to support productive investment and economic growth.
List of top 20 defaulters released by Finance Minister as follows
1. S Alam Super Edible Oil Limited
2. S Alam Vegetable Oil Limited
3. Salam Refined Sugar Industries Limited
4. S Alam Cold Rolled Steels Limited
5. Sonali Traders
6. BEXIMCO
7. Global Trading Corporation Limited
8. Keman Ispat Limited
9. S Alam Trading Company Private Ltd
10. Infinite CR Strips Industries Limited
11. Keya Cosmetics Limited
12. Deshbandhu Sugar Mills Limited
13. Power Pack Mutiara Keraniganj Power Plant 14. Power Pack Mutiara Jamalpur Power Plant
15. Pacific Bangladesh Telecom Limited
16. Karnaphuli Foods (Pvt.) Limited
17. Murad Enterprise
18. CLC Power Company Limited
19. Beximco Communications Limited
20. Rangdhanu Builders (Pvt.) Ltd.
Loan Defaults Linked to MPs and Their Interests: In a particularly sensitive revelation, the finance minister disclosed that current members of parliament and their related business entities have accumulated defaulted loans amounting to Tk 11,117.31 crore across banks and financial institutions.
This figure has intensified concerns over conflicts of interest and accountability, especially as lawmakers play a crucial role in shaping financial sector policies.Experts cited by The Daily Industry emphasized that political exposure in the banking sector remains one of the key structural weaknesses undermining financial discipline in Bangladesh.
Top 20 Loan Defaulters: The list of the top 20 defaulters presented in parliament includes several prominent business groups and companies spanning sectors such as edible oil, steel, sugar, power generation, telecommunications, and construction.
Among them, multiple entities linked to the S Alam Group feature prominently, including:S Alam Super Edible Oil Ltd.S Alam Vegetable Oil Ltd.S Alam Refined Sugar Industries Ltd.S Alam Cold Rolled Steels Ltd.S Alam Trading Company Pvt. Ltd.
Other major defaulters include:Sonali Traders, Bangladesh Export Import Company Ltd.Global Trading Corporation Ltd.Chemon Ispat Ltd.Infinite CR Strips Industries Ltd.Keya Cosmetics Ltd.Deshbandhu Sugar Mills Ltd.Power Pack Mutiara Keraniganj Power Plant Ltd.Power Pack Mutiara Jamalpur Power Plant Ltd.Pacific Bangladesh Telecom Ltd.Karnaphuli Foods Pvt. Ltd.Murad Enterprise. CLC Power Company. Beximco Communications Ltd.Rongdhonu Builders Pvt. Ltd.
The concentration of defaults among large corporate borrowers highlights what analysts describe as a “moral hazard problem,” where influential borrowers are perceived to face limited consequences for non-repayment.
Government Measures for Loan Recovery: In his response, the finance minister outlined a series of steps taken by the government to address the rising volume of defaulted loans. These include:Strengthening legal frameworks for loan recovery, Enhancing the capacity of special tribunals dealing with financial disputes, Tightening monitoring mechanisms within banks, Encouraging loan rescheduling and restructuring under stricter conditions.
However, economists quoted in The Daily Industry expressed skepticism about the effectiveness of these measures, arguing that enforcement remains weak and often selective.They stressed that without addressing underlying governance issues-such as political influence over state-owned banks and lack of accountability-recovery efforts are unlikely to yield meaningful results.
Structural Weaknesses in the Banking Sector: The persistent rise in defaulted loans reflects deeper structural problems within Bangladesh's financial system. These include:due diligence in loan approval processes, corporate governance in banks, Inadequate risk assessment frameworks, political influence, in credit allocation.
Banking insiders told The Daily Industry that many large loans were approved without proper collateral or feasibility assessments, often under pressure from influential quarters.As a result, the burden of bad loans continues to accumulate, eroding the capital base of banks and limiting their ability to extend fresh credit to productive sectors.
Impact on Economy and Investment: The ballooning volume of classified loans is having far-reaching implications for the broader economy.High levels of NPLs reduce banks' profitability, increase provisioning requirements, and constrain liquidity. This, in turn, leads to higher lending rates and reduced access to credit for businesses-particularly small and medium enterprises (SMEs).
Economists warn that the situation could deter both domestic and foreign investment, as a weak banking sector undermines confidence in the overall financial system.
“The banking sector's inability to recycle funds efficiently is becoming a major bottleneck for economic growth,” noted a financial analyst quoted by The Daily Industry.
Calls for Reform and Accountability: The latest disclosure has renewed calls for comprehensive reforms in the banking sector, including:Greater transparency in loan classification and reporting, Stronger regulatory oversight by the central bank, Accountability for willful defaulters, Restrictions on politically exposed persons in bank borrowing. Policy experts argue that publishing the list of top defaulters in parliament is a positive step toward transparency, but stress that it must be followed by concrete action.”There is no shortage of data or diagnosis-the real challenge is implementation,” one economist told The Daily Industry.
Parliamentary Oversight and Public Pressure: The discussion in parliament reflects growing political and public concern over the state of the banking sector.Lawmakers across party lines have increasingly raised questions about loan defaults, capital shortfalls, and governance failures in banks.Observers believe that sustained parliamentary oversight, combined with media scrutiny and public pressure, could play a crucial role in pushing for reforms.
The revelation that classified loans have approached Tk 5.45 trillion, along with the identification of the top 20 defaulters, paints a sobering picture of Bangladesh's banking sector.While the government has outlined measures to address the issue, the scale and persistence of loan defaults suggest that deeper structural reforms are urgently needed. As The Daily Industry notes, restoring discipline in the financial sector will require not only stronger policies but also the political will to enforce them-particularly when it comes to influential defaulters. Without such action, the growing burden of bad loans could continue to weigh heavily on the economy, undermining growth, investment, and financial stability in the years ahead.
