United News of Bangladesh

Bangladesh’s state-owned commercial banks have the capacity to expand lending but continue to lag in timely loan recovery, said central bank Governor Ahsan H Mansur on Monday, underscoring a key structural weakness in the country’s banking system. Speaking at Sonali Bank’s Annual Conference 2026 in Dhaka, Dr Mansur said weak borrower selection remains a major factor behind rising defaults, adding that improving credit appraisal is essential to keeping loans from turning non-performing. Years of tight regulatory controls have made state banks excessively cautious, constraining credit growth and limiting their contribution to the broader economy, the Governor said. Banks to remain closed for 4 days While such caution was once necessary, he pointed out, an excessively restrictive lending model, similar to that seen before 2000, is incompatible with the needs of a modern economy. “If a bank mobilises deposits but fails to play an effective role in the macroeconomy, its success remains limited,” Mansur said, urging Sonali Bank to move beyond its conservative approach and expand lending more assertively. He pointed to a wide gap between Bangladesh’s banking sector and global peers, particularly in consumer and housing finance, where state-owned banks have so far played only a marginal role despite strong market potential. Dr Mansur called on Sonali Bank to transform itself into a ‘full-fledged commercial bank’ operating strictly on commercial principles, a shift he said is necessary to ensure long-term profitability. On the bank’s financial position, the Governor highlighted several positive developments. Profits earned last year will be used to cover capital and provisioning shortfalls, he said, expressing confidence that Sonali Bank could eventually resume dividend payments. The bank’s non-performing loan ratio has already fallen below 18%, according to Mansur, who said the figure could decline further if the bank increases high-quality lending. Bangladesh Bank to ease rules, give banks more freedom: Governor He also said the government plans to give Sonali Bank greater operational autonomy, allowing it to function on commercial considerations, and a policy direction, he hopes, future governments will maintain. Dr Mansur urged Sonali Bank to step up efforts to attract remittances, strengthen support for exporters and identify capable small and medium-sized enterprise borrowers at the grassroots level, saying these areas will be critical to both the bank’s performance and the country’s economic growth.

Bangladesh Bank Governor Ahsan H Mansur on Thursday said that the country’s inflation rate has dropped significantly—from 14.5 percent to 8.5 percent—over the past nine months. The Governor made the remarks while speaking as the chief guest at the opening ceremony of the Banker SME Women Entrepreneurs' Gathering, Product Exhibition and Fair, held at the Bangla Academy premises in the capital. He expressed optimism that inflation could fall further by 4 to 5 percentage points if the government maintains consistent efforts and stable policies. US inflation eases in March as consumers rush to beat Trump tariffs The SME and Special Programmes Department of Bangladesh Bank organised the event. According to the latest estimates from the Bangladesh Bureau of Statistics (BBS), overall inflation stood at 9.17 percent in April, down from 9.35 percent in March. Both food and non-food inflation declined last month. However, the average annual inflation remains above 10 percent. Bangladesh Bank Deputy Governor Nurun Nahar, Executive Director Md Khasru Parvez, City Bank MD and CEO Masrur Arefin, and Naushad Mostafa, Director of the SME and Special Programs Department, also spoke at the event. “If we keep printing money and expect inflation to drop, that won’t work. We need to adopt a strict stance. Inflation will take time to ease, but it is on the right track and will continue to decline gradually.” Governor Mansur said. Referring to the current figures, he said, “Food inflation was at 14.5 percent, which has now come down to 8.5 percent. Non-food inflation, which was over 12.5 percent, is now slightly above 9 percent.” “I am hopeful that it will fall further. If we maintain policy stability and put in the effort, reducing inflation to 4 to 5 percent is achievable—and that would be a satisfactory outcome for all,” he added. Addressing gender disparities in financial access, Dr Mansur said women are still not receiving their rightful share of banking services. “Women are getting only 6 percent of total disbursed loans in the banking sector. This is far from realistic. There are many obstacles for women in accessing loans. We must find ways to overcome these and move women forward. Financial awareness among women also needs to improve,” he said. The Governor went on to say, “We are committed to supporting women entrepreneurs, but not merely by expanding central bank funds, as that would require creating new money. Instead, commercial banks must lend from their own resources, recognising women's rights in financial inclusion.” The ongoing four-day fair, organised by Bangladesh Bank to boost the participation of women entrepreneurs, will run until May 11. A total of 68 women entrepreneurs from various districts are showcasing their products at the event. On the final day, six women entrepreneurs will be honoured for their achievements.