Bank balance sheets in Bangladesh carry more than BDT 6.5 trillion in loans that have slipped into default, while a further BDT 500 billion has been written off as unrecoverable. Non-bank financial institutions have lost more than one-third of their loan portfolios to defaults. Insurance firms and capital market entities have also reported large losses tied to fraud and misappropriation. Similar patterns run across much of the financial system, raising doubts about how much of the sector’s reported BDT 42.5 trillion in assets actually exists.
Bangladesh Bank recently set out to determine the sector’s total asset base, which had never been compiled in a unified dataset. Its statistics department calculated that banks, insurers, non-bank financial institutions, and capital market entities held combined assets of over BDT 42.42 trillion by June 2025. The central bank and scheduled banks combined accounted for 96 percent of that figure. Life and general insurances held 1.6 percent. Capital market entities held only 1.3 percent.
Economists and industry analysts, however, say the central bank’s estimate reflects gross assets. It does not account for the scale of assets looted over the past fifteen years. The interim government, they argue, could have used its mandate to uncover a more accurate picture of financial sector assets, but it has not done so. Bangladesh Bank has launched forensic audits in a handful of private banks to verify asset quality. Yet no other regulator has followed suit. Banks, insurers, and other financial institutions suffered widespread fraud and misgovernance during the ousted Awami League’s fifteen-year rule, and a system-wide forensic review would likely show that a substantial share of reported assets no longer exists.
Economist Dr. Mustafa K Mujeri said the central bank’s figures resemble an account of assets that appear “on paper but not in the vault”.
“The central bank’s statistics are calculated on a gross basis. They are compiled by adding up the figures reported by each institution in their annual statements. But the truth is, we don’t really know how much of the reported assets are intact. We are seeing that non-performing loans in the country’s banking sector have reached BDT 6.5 trillion. Insurance companies, financial institutions, and many firms in the capital market and broader financial sector are effectively insolvent. Measuring the assets of the country’s financial institutions using gross figures is meaningless.” —Dr. Mustafa K Mujeri, Executive Director of the Institute for Inclusive Finance and Development (InM) and a former Chief Economist at Bangladesh Bank
He added, “The interim government had an opportunity to uncover the real assets of the country’s financial sector through forensic audits. But so far, apart from a few banks, no such initiative has been taken elsewhere. Over the past fifteen years, the financial sector has suffered unlimited damage. You cannot patch up these wounds with simple remedies. What is needed is a strong measure. Yet we have seen no action of that kind from the government.”
Bangladesh Bank has titled its asset assessment for financial institutions “A Report on Other Financial Corporations (OFC) Survey”. The exercise drew on data from all banks and financial institutions as well as 477 of the country’s 768 OFCs. Only 256 entities had submitted information for the March quarter. The June quarter report included partial data, for the first time, from asset management companies, asset managers, closed-end and open-ended mutual funds, and alternative investment funds.
Bangladesh Bank says the report offers at least a partial but meaningful view of OFCs. A fuller dataset, once all institutions are included, would give a broader picture of their condition. It argues that a complete map of assets would deepen research and help policymakers identify risks and design more effective regulation.
“There are no consolidated statistics on the real asset values of institutions outside the country’s banks and NBFIs. That is why we have taken the initiative to estimate the size of these institutions’ assets. The report has been prepared based on the information we have gathered so far. For this, asset data was taken from the institutions’ financial statements, so it represents a gross calculation of assets. The report covers 90 percent of all types of financial institutions in the country, and it will be further expanded in the future.” —Masud Aktar Talukder, Director, Bangladesh Bank’s Statistics Department
Masud Aktar Talukder served as editor of the report, according to which, the country’s financial institutions held BDT 42.42 trillion in assets at the end of June this year. Depository corporations, which include deposit-taking banks and NBFIs, held the largest share at BDT 33.1 trillion. Bangladesh Bank held BDT 7.37 trillion.
Doubts persist over how much of the asset base remains intact in institutions that take public deposits. Bank defaults more than tripled over the past year. By September, disbursed bank loans stood at BDT 18.03 trillion, of which BDT 6.44 trillion had fallen into default. That means 35.73 percent of bank lending is now non-performing. Five Shariah-based banks have already been cleared for consolidation into a single entity after they failed to meet depositors’ withdrawal requests. More than a dozen state-owned and private banks face severe stress.
Non-bank financial institutions are in similar distress. Of the country’s 35 NBFIs, 21 now have default rates above 50 percent. Outstanding loans in the sector total about BDT 760 billion, with BDT 280 billion in default, equal to roughly 36 percent of lending. Bangladesh Bank has initiated liquidation proceedings against nine NBFIs that cannot repay depositors. Eleven others are in precarious condition.
The report also covers asset data from 46 general insurers and 33 life insurers. Life insurance companies hold BDT 487.39 billion in assets. General insurers hold BDT 197.12 billion. The sector faces persistent allegations of opaque investments, weak asset management, and failures to honour claims. Oversight remains fragile. Financial statements show repeated breaches of accounting standards. These problems have left the quality of insurance assets in serious doubt.
Bangladesh House Building Finance Corporation, BB Equity and Entrepreneurship Fund, BB Grihayan Tahbil & Fund Management, Palli Karma-Sahayak Foundation, and Small and Medium Enterprise Foundation are classified as other OFCs in the report. Together, they hold assets worth BDT 287.32 billion.
Five non-deposit-taking NBFIs collectively hold BDT 225.88 billion. These include Agrani SME Financing Company Limited, Bangladesh Infrastructure Finance Fund Limited (BIFFL), Infrastructure Development Company Limited (IDCOL), Saudi-Bangladesh Industrial and Agricultural Investment Company (SABINCO), and UAE-Bangladesh Investment Company Limited (UBICO).
Mobile financial service (MFS) providers report assets of BDT 177.87 billion, including data from bKash, Nagad, Tap, and Upay. The Anti-Corruption Commission said in February it found preliminary evidence of BDT 23 billion in corruption and money laundering at Nagad, which may affect the total asset figures for the MFS sector.
Among capital market institutions, brokerage houses hold the largest share at BDT 265.48 billion. The survey received responses from 163 of 374 brokerages. Merchant banks report BDT 158.43 billion in assets, based on submissions from 64 banks. Both brokerages and merchant banks have long struggled with negative equity, currently totalling BDT 100 billion. Despite regulatory requirements, these institutions prepared financial statements with exemptions from BSEC, exacerbating the impact of negative equity on reported assets.
“There is no dispute over the asset data for capital market institutions in the report. But a large portion is negative equity. The capital market has not kept pace with the country’s economic growth; it has fallen behind. During the interim government, we expected improvements, but even with adviser directives, government companies could not be listed. It seems capital markets are not a government priority. The next elected government must focus on development, and we hope it does.” —Saiful Islam, President, DSE Brokers Association of Bangladesh (DBA)
Of 100 open-ended mutual funds, 68 provided data, holding BDT 45.28 billion in assets. Closed-end mutual funds report BDT 34.75 billion from 27 of 39 funds. Asset management companies and managers hold BDT 18.21 billion, based on responses from 43 of 75 companies. Alternative investment funds report BDT 2.12 billion, with data from eight of 12 funds. Eight credit rating agencies provided information, reporting BDT 680 million in assets.
Questions remain over the quality of mutual fund investments. Several open-ended funds have faced past embezzlement cases. So far, no initiative has brought mutual funds and asset managers under forensic audit, leaving the sector’s asset integrity in doubt.
The report also classifies the Dhaka Stock Exchange (DSE), Chittagong Stock Exchange (CSE), and Central Depository Bangladesh Limited (CDBL) as OFCs under Bangladesh Securities and Exchange Commission’s supervision. These institutions hold BDT 41.46 billion. Altogether, capital market institutions account for BDT 567.77 billion, just 1.3 percent of total financial sector assets.
“Capital markets occupy a very small share of financial sector assets. To expand, we need to increase both demand and supply. We must bring in strong IPOs, strengthen the bond market, and energise the mutual fund sector. Institutional and foreign investors are extremely few. We also need modern products and better governance. The ministry, government agencies, and all capital market stakeholders must coordinate to develop the market. Any isolated effort will fail.” —Mominul Islam, Chairman, Dhaka Stock Exchange (DSE)