Bangladesh Krishi Bank (BKB), established to ensure easy access to loans for the agriculture sector, has been incurring losses year after year. In just the past six fiscal years, the state-owned specialized bank has faced nearly BDT 191 billion in net losses. Its capital shortfall has now reached BDT 292.07 billion. The bank’s record on loan defaults is also alarming. As of the end of June 2025, 49.44 percent of its total loans were classified as defaults, amounting to BDT 175.38 billion, according to bank documents.

More concerning than this financial disaster is the current state of the bank’s management. In just the past year, a total of 4,906 officers and employees were transferred, with many of them reassigned multiple times. A powerful syndicate has emerged within the bank around transfers and promotions. The syndicate has been accused of granting transfers or promotions to preferred postings in exchange for bribes ranging from BDT 50,000 to BDT 500,000. The bank has set up a committee to investigate these allegations. However, a committee member told Bonik Barta that they were not being allowed to work independently.

Most of the bank’s officials have long been more engaged in political rivalries than in programs aimed at improving farmers’ livelihoods. This intensified after August 5, 2024. Previously, all affairs of the bank were controlled by “Bangabandhu Parishad” and “Swadhinata Bankers Parishad,” with CBA leaders as key instruments. Now, two groups—“Jatiyotabadi Forum” and “Zia Parishad”—are vying for control, with Jatiyotabadi Forum holding the stronger position. The forum’s leader, Md Zahid Hossain, who is also the Deputy General Manager (DGM) of the Human Resources Management Division, controls all promotions, postings, and transfers, according to insiders. Current CBA leaders are reportedly being used as tools in this process.

Anonymously speaking to Bonik Barta, one General Manager said that administrative discipline has completely collapsed due to transfer-related corruption and political infighting. “From the Managing Director (MD) down to senior officials, all were appointed from state-owned commercial banks. They have no understanding of Krishi Bank’s operations or agricultural loan distribution. They are also failing in administrative management. As a result, the entire bank has lost its discipline,” he said.

Efforts to obtain comments from Krishi Bank MD Sanchia Binte Ali were unsuccessful. Despite multiple calls over two days, she did not answer her phone. Text messages also went unanswered, and she was not found at the bank. Officials said she is currently in Sylhet.

Following the 2024 student-led mass uprising, the Interim Government appointed Sanchia Binte Ali as Krishi Bank MD in October 2024. Several General Managers, however, alleged that they do not get to meet with the MD. “She never answers phone calls,” they said.

According to data from Krishi Bank, as of the end of June 2025, the bank’s deposit balance stood at BDT 502.03 billion. At the same time, its loan balance was BDT 354.72 billion. Of this disbursed amount, BDT 175.38 billion, accounting for 49.44 percent of total loans, was classified as defaulted. In contrast, as of June 2024, the bank reported only BDT 43.29 billion in defaulted loans, which was 12.72 percent of total loans at that time.

Bank officials said the surge in defaults resulted mainly from what they described as an irrational decision by the Bangladesh Bank. Several Branch Managers explained that previously, Krishi Bank had six months to classify loans as defaulted. But to comply with International Monetary Fund (IMF) conditions, the period was reduced to three months, similar to other commercial banks. Most Krishi Bank loans, however, are taken by marginal farmers. Crops grown with these loans take longer than three months to mature.

One Branch Manager, speaking to Bonik Barta on condition of anonymity, said, “We provide loans for Boro cultivation. From planting the Boro seedlings to harvesting the paddy takes more than three months. So how can a farmer repay a loan for Boro cultivation within three months? This was not considered when the default policy was changed. As a result, crop loan disbursement by Krishi Bank has nearly stopped.”

In addition to the change in classification periods, rescheduled crop loans have also been marked as defaults. Bank officials said Bangladesh Bank had earlier directed that crop loans could be rescheduled without any down payment. Following that instruction, defaulted crop loans were rescheduled. But this year, a central bank inspection team classified all rescheduled loans as defaults. The bank’s top executives accepted these irrational decisions by the central bank without raising objections, officials said.

Commercial banks in the country prepare their annual financial statements on a December basis. However, Krishi Bank prepares its financial reports on a fiscal year basis, ending in June. The bank’s officials said the financial accounts for FY 2023–24 have not yet been finalized. Preliminary estimates show the bank incurred a net loss of BDT 65.13 billion in that fiscal year. In FY 2024–25, the bank also posted an operational loss of BDT 19.34 billion. After tax payments and reserve allocations, losses are expected to exceed BDT 70 billion.

Earlier, Krishi Bank reported net losses of BDT 23.85 billion in FY 2022–23, BDT 12.82 billion in FY 2021–22, BDT 12.41 billion in FY 2020–21, and BDT 6.79 billion in FY 2019–20. Altogether, the bank has incurred net losses totaling BDT 191 billion over the past six fiscal years. As a result, its capital shortfall has crossed BDT 290 billion. As of the end of June 2025, the bank’s capital deficit stood at BDT 292.07 billion.

Regarding Krishi Bank’s fragile state, Bangladesh Bank’s Executive Director and Spokesperson Arief Hossain Khan told Bonik Barta, “Due to pressure from the IMF, the loan classification period for all banks in the country has been reduced to three months. We had little choice in this matter. However, I personally believe that Krishi Bank should be exempted from this policy. For the sake of farmers, agriculture, and food production, Krishi Bank must be strengthened. The central bank will take appropriate steps to eliminate all irregularities and corruption in the bank. It must also ensure that genuine farmers have access to loans from Krishi Bank.”

Bangladesh Krishi Bank was established in 1973 to provide loans to farmers. In 1986, then-President Hussain Muhammad Ershad restructured the bank, creating Rajshahi Krishi Unnayan Bank (RAKUB) with branches in the Rajshahi region. Similar to the Bangladesh Krishi Bank, RAKUB’s financial condition is also precarious. Merging these two specialized banks has been discussed for years, but bureaucratic complications and indecision have prevented the process from starting.

On this matter, Bangladesh Bank Spokesperson Arief Hossain Khan said, “Bangladesh Bank is currently working on merging five private banks. If this succeeds, it will focus on other public and private banks. If the government takes the initiative, merging Krishi Bank and RAKUB will become much easier.”