Tk60,000 Crore Can Rescue Banks. Can It Restore Trust?

A bank survives on money, but banking survives on trust. Depositors entrust institutions with their savings because they believe those funds will remain safe, accessible and responsibly managed. When that confidence breaks, the consequences extend far beyond bank balance sheets. Businesses postpone investment, borrowers face tighter credit, and households become anxious about their future.

Bangladesh’s banking crisis must be understood in precisely these terms. The capital’s shortage is serious, but the governance failure behind it is more profound. The prospect of spending Tk60,000 crore annually to repair the sector raises a question that cannot be answered through budget allocations alone: what assurance do citizens have that fresh money will not disappear through the same channels that swallowed earlier funds?

If such expenditure continues for five to eight years, the cumulative commitment would reach Tk300,000 crore to Tk480,000 crore. Before undertaking a programme of this scale, the authorities must explain its financing, beneficiaries, conditions and expected results.

Public support carries an opportunity cost. Resources committed to bank rehabilitation compete with spending on hospitals, classrooms, infrastructure and social protection. Depending on how assistance is financed, citizens could bear the burden through taxation, public debt, reduced services or inflationary pressure. Protecting depositors and preserving financial stability may justify intervention. Protecting those responsible for institutional failure does not.

The scale of distress is already unmistakable. Bangladesh Sangbad Sangstha, citing Bangladesh Bank data, reported that non-performing loans accounted for 32.78 per cent of total lending in June 2026. That figure places roughly one-third of outstanding loans in the default category. It should not, however, be confused with an audited estimate of money stolen: loan default and criminal misappropriation are different matters, requiring different evidence and remedies.

This distinction matters because credible reform begins with an honest diagnosis. Commercial losses, weak credit assessment, connected lending, deliberate default and fraud cannot all be treated as the same problem. Nor can repeated rescheduling substitute for a realistic assessment of repayment capacity. Bangladesh needs independent examinations of bank assets to establish which institutions remain viable, how much capital they require and where losses originated. Concealing bad loans may temporarily improve reported figures, but it postpones recovery and increases its eventual cost. 

Capital support must then carry enforceable conditions. Shareholders should absorb losses before taxpayers are asked to replenish depleted capital. Boards and senior managers responsible for serious failures should face removal and, where evidence warrants, legal proceedings. Every assisted bank should operate under a published recovery plan with measurable deadlines.

Without these safeguards, recapitalisation risks teaching a dangerous lesson: private actors can retain the gains from reckless conduct while the public inherits the losses. Regulatory independence is equally essential. Bangladesh Bank must have the authority, professional capacity and institutional protection to act against powerful borrowers and bank owners. That independence must be accompanied by accountability for its own supervisory decisions.

Professional boards, transparent ownership structures and effective restrictions on lending to connected parties should become enforceable standards. Political access must cease to function as a substitute for creditworthiness. Asset recovery must also move beyond promises. Domestic investigations and international cooperation require sound evidence, skilled legal teams and sustained institutional coordination. Recovery can be slow and uncertain; anticipated proceeds should therefore never be treated as money already available to finance rehabilitation.

The public deserves regular disclosure of funds committed, losses recognised, assets recovered and progress against restructuring targets. Such reporting would allow citizens to distinguish genuine improvement from another round of reassuring announcements. Depositors, meanwhile, need clear information about access to their money and the protections available to them. Uncertainty can deepen an otherwise manageable crisis. Credible communication must accompany credible action.

The government’s task is therefore larger than repairing a collection of balance sheets. It must demonstrate that the rules governing banking have changed and that those rules apply regardless of wealth, influence or political affiliation. Tk60,000 crore may help restore capital. It cannot purchase credibility while impunity remains intact. Bangladesh will begin to recover its lost banking confidence when public money comes with public accountability and when those who caused the losses can no longer pass the bill to everyone else.
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The writer is a political analyst, private banking financial crime compliance specialist, columnist and poet based in Geneva, Switzerland. He can be reached at [email protected]