BB plans to cap corporate lending at 45%, boost SME and retail credit

Bangladesh Bank is considering setting targets for commercial banks next year to reduce their heavy dependence on large corporate borrowers and increase lending to small and medium enterprises (SMEs) and retail customers, Governor Md Mostakur Rahman has said.

Under the proposed framework, banks may be asked to allocate at least 20% of their total lending to retail customers and 35% to SMEs, bringing the share of corporate lending down to 45% from the current 70–80% in private commercial banks.

The central bank is also working to attract more foreign currency from expatriate Bangladeshis by promoting Non-Resident Convertible (NRC) accounts and relaxing investment restrictions on three types of expatriate bonds, including removing their existing 15-year maturity ceiling.

The governor disclosed these plans while speaking at the Fifth Bangladesh Economic Summit 2026, organised by Bonik Barta at Pan Pacific Sonargaon Hotel in Dhaka on Saturday.

He said commercial banks were not licensed solely to finance large corporate entities and that the existing concentration of lending needed to be addressed to ensure a more balanced distribution of credit across the economy.

"I am talking to the managing directors and chief executive officers of banks on this issue. I think we can set a target for lending next year. We will request bankers to allocate at least 20% of their lending to retail customers and 35% to SMEs," he said.

He added that corporate lending, which currently accounts for 70–80% of private banks' total lending, should be brought down to around 45%.

"The financing needs of large corporates should be met through the capital market," he said.

According to the governor, shifting a greater portion of corporate financing to the capital market would create purchasing power in the economy and make it easier for large industries to sustain their operations.

The proposed lending targets are aimed at diversifying credit flows, expanding financing opportunities for smaller businesses and reducing banks' excessive exposure to large corporate borrowers.

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BB seeks more foreign currency through expatriate accounts

Alongside efforts to diversify domestic lending, Bangladesh Bank is pursuing initiatives to attract foreign currency from non-resident Bangladeshis to strengthen the country's foreign exchange reserves.

Mostakur Rahman said the central bank had introduced Non-Resident Convertible (NRC) accounts to encourage expatriates to deposit their foreign currency in the country's banking system.

Bangladesh Bank is also conducting international promotional campaigns for the accounts with support from the Asian Development Bank (ADB).

Expressing optimism about the initiative, he said Bangladesh could attract substantial foreign currency if the facility gained popularity among expatriates.

Citing examples from neighbouring countries, he said India had mobilised around $32 billion through similar accounts within four to five months, while Pakistan had attracted approximately $13 billion.

Bangladesh also wants to tap this potential, he said.

The governor added that the central bank was working to ensure that payments falling due under NRC accounts over the next three to four years would not create significant pressure on the country's foreign exchange reserves.

15-year maturity ceiling on expatriate bonds may go

Bangladesh Bank is also working to remove the 15-year maturity ceiling on three types of bonds available to non-resident Bangladeshis, allowing expatriate investors greater flexibility in choosing investment tenures.

Mostakur Rahman said the maturity of these bonds had been restricted to a maximum of 15 years around five years ago, limiting investment opportunities for expatriates.

"We are working to make the maturity period unlimited," he said.

According to the governor, investments in the three categories of expatriate bonds currently stand at around $606 million.

He expressed hope that removing the maturity restrictions would make the bonds more attractive, encourage expatriates to invest additional foreign currency and increase dollar inflows into the domestic economy.

The move is also expected to support the country's foreign exchange reserves by bringing more expatriate savings into formal investment channels.

Banks urged to channel excess liquidity into productive sectors

Speaking at the summit, City Bank Managing Director and CEO Mashrur Arefin said banking sector reforms and efforts to restore governance were gradually helping rebuild public confidence in the financial system.

He said commercial banks were holding excess liquidity of around Tk4.82 lakh crore, which should be channelled into productive sectors to accelerate economic growth.

Rather than focusing solely on expanding lending volumes, banks should prioritise credit quality and provide more financing to SMEs, small entrepreneurs, retail businesses and consumers, he said.

Arefin also highlighted the need to bring an estimated Tk1.87 lakh crore held outside the formal banking system into the mainstream economy.

Wider adoption of QR-code-based transactions could help bring these funds into the formal financial system, he suggested.

On the country's macroeconomic situation, he said foreign exchange reserves had increased to $30.12 billion under the IMF's BPM6 methodology.

Remittance inflows grew 14.2% between 1 July and 11 November of the current fiscal year, reaching nearly $13 billion, he said.

Exports also recorded 6% growth, although the country's export earnings remained heavily concentrated in the readymade garment sector, which accounts for around 80.7% of total exports.

Arefin called for establishing asset management or asset recovery companies to address the growing burden of non-performing loans and help banks clean up their balance sheets.

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Business leaders seek sectoral support and fresh investment

Metropolitan Chamber of Commerce and Industry (MCCI) President Kamran T Rahman called for low-interest financing to revive the country's tea industry, saying tea producers had been selling their products below production costs for at least five years.

Bangladesh now produces more than 100 million kilograms of tea annually, compared with around 30 million kilograms in 1972.

However, rising costs of electricity, gas and fertiliser have put tea producers under increasing financial pressure, he said.

Walton Hi-Tech Industries Managing Director SM Mahbubul Alam sought additional policy support to expand electronics exports and low-cost financing to accelerate the adoption of renewable energy.

Meanwhile, Southeast Bank Chairman MA Kashem urged the government to organise an international investors' conference, similar to the initiative taken in 1986, to attract foreign investment and restore confidence in Bangladesh's economy.

He said such an initiative could help showcase investment opportunities, encourage foreign investors and create fresh momentum for economic growth.