The DSEX, the benchmark index of the Dhaka Stock Exchange (DSE), increased by 33 points over the past week, but the banking sector failed to regain momentum despite the rise in the index. A weekly analysis of the DSE report reveals that during the five trading days, both the share prices and turnover in the banking sector declined. The prices of shares of the 36 listed banks dropped by an average of nearly 5%. Besides, turnover in the sector decreased by 8% compared to the previous week, reflecting waning investor interest. Previously regarded as a safe investment, the banking sector has been losing the trust of general investors due to a persistent decline in its performance. Over the past week, the number of shares traded in this sector dropped by 11.89%. Read: Stock market was neglected for 15 years: DSE Chairman Alongside this, most shares linked to S. Alam Group saw a downward trend throughout the week. Apart from banking, the financial institutions sector also experienced a significant decline, with share prices falling by 29.85% during the week.  

Islami Bank Bangladesh PLC has showcased remarkable resilience, achieving a 5% growth in deposits year-on-year as of December 2024. Despite challenges in the banking sector, the bank has firmly established its position as a trusted institution among depositors and investors. The financial statement of Islami Bank revealed deposits amounting to approximately Tk1.61 lakh crore in December 2024, compared to Tk1.54 lakh crore in December 2023. Investments also saw an increase, rising from Tk1.50 lakh crore in 2023 to Tk1.59 lakh crore in 2024. December 2024 proved to be a record-breaking month for remittances, with the bank receiving around Tk681,00 crore—approximately one-third of the country’s total remittances for the month. Islami Bank continues to lead the private sector in import and export finance, recording Tk648,00 crore in import financing and Tk324,00 crore in export financing for 2024. Currently serving 2.5 crore customers, the bank’s expansive network of 400 branches, 265 sub-branches, 2,800 agent banking outlets, and 3,000 ATM/CRM booths underscores its commitment to reaching every corner of the nation. A branch manager, speaking anonymously, assured, “Customers can withdraw money from branches without interruption. There are no complaints about liquidity issues, and cash transactions are operating normally.” Read: Islami Bank to issue new shares, sell S Alam Group's seized ones The bank’s RTGS (Real Time Gross Settlement) system has also remained fully operational, ensuring smooth and timely money transfers. Resilience Amid Challenges Despite the liquidity challenges faced by the banking sector in August 2024, Islami Bank has managed to recover swiftly. Governor of the Bangladesh Bank Dr Ahsan H Mansur recently commended the bank's important role in the country’s economy, stating, “Islami Bank is the number one bank in the country. It has turned around within the shortest time and is moving forward smoothly. This bank will not look back anymore.” Dr Shah Md. Ahsan Habib, a professor at the Bangladesh Institute of Bank Management (BIBM), attributed the bank’s resilience to its deep grassroots connections and the strong social networks of its employees. Read more: Islami Bank appoints 4 audit firms to investigate irregularities post S Alam Group takeover He highlighted the role of small depositors, saying, “In the context of Bangladesh, small depositors are the assets of a bank. Islami Bank, with its vast network, has successfully gained the trust of these depositors.” Leadership and Achievements Islami Bank’s Chairman, Md Obayed Ullah Al Masud, affirmed the institution’s consistent leadership in the private banking sector. He revealed that Bangladeshi expatriates remitted $26.89 billion in 2024, with Islami Bank facilitating 21.47% of this, equivalent to remittances from 163 countries. The top remittance-sending nations included Saudi Arabia, the USA, the UAE, Malaysia, Singapore, Qatar, Italy, and Kuwait. “Our 5% deposit growth in 2024 compared to 2023 is a testament to the confidence people have in us. Islami Bank will only continue to move forward,” Masud stated confidently. The bank’s contributions to the economy are vast, with investments in over 6,000 industries, support for 20 lakh entrepreneurs, and employment opportunities for 1 crore people. Read more: No restrictions on business operations and opening LCs in Islami Bank: BB Governor Besides, its small investment schemes have benefited 18 lakh marginal families, further cementing its role as a driver of socio-economic development. As the leading private sector bank in Bangladesh, Islami Bank’s robust performance, grassroots connections, and unwavering customer trust place it firmly on the path to continued success.

Bangladesh Bank Governor Dr Ahsan H Mansur said on Sunday that Bangladesh has made significant progress in the development of its financial sector though there have been numerous shortcomings that necessitate a thorough self-assessment. “The banking sector of Bangladesh has progressed a lot. There is no doubt about it. On the other hand, it must also be said that despite our achievements, there are many failures in terms of how far the banking sector could have progressed or how far the entire financial sector could have progressed,” he said. The central bank governor made this remark while inaugurating the Golden Jubilee Celebration of Bangladesh Institute of Bank Management (BIBM) in the city. He, however, said no single group or authority is responsible for the failures of this sector. “We all might have worked on it (this financial sector) differently from our own positions. We all might have worked with integrity. Maybe there was a deviation or not. We have to do this self-analysis.” Dr Mansur said the banks are not so much interested in financing some non-conventional sectors like SMEs and new sectors like climate financing and green financing. “Money has been given for many sectors but that money is not being transferred. Those who are running banks and financial institutions are not very enthusiastic about these sectors or are not willing to take risks. We need to change our mindset here.” He hoped that the financial institutions will play a stronger role in financing the non-conventional and new sectors. Dr Mansur, also the BIBM Governing Board Chairman, asked the BIBM to work on the banking sector’s new challenges like climate financing, green financing, developments in the financial sectors and technological innovations. Noting that such institutions are very necessary for the development of the banking sector, he said BIBM has been able to play an important role in building human resources in this sector  “To develop the financial sector, it is not possible without such training institutes,” he said. The Bangladesh Bank Governor asked the BIBM to pay attention to attract foreign students and spread its name and fame to the international arena. BIBM Director General Dr Md Akhtaruzzaman chaired the inaugural session, while Association of Bankers Bangladesh (ABB) Vice Chairman and City Bank Managing Director SM Mashrur Arefin, Chair of the Organising Committee Dr Shah Md Ahsan Habib and its member secretary Dr Mohammad Tazul Islam spoke on the occasion. BIBM is the national training, research, consultancy and education institute on banking and finance collectively owned by the Banking sector of the country.  Read: Bad loans in banking sector hits Tk6.75 lakh crore:  White Paper The Bangladesh Institute of Bank Management (BIBM) was established in 1974 with the primary objective of providing training to the officials of banks and financial institutions in Bangladesh, aimed at enhancing and updating their skills. Over the years, the institute has expanded its focus and now offers specialised training programmes for mid- and senior-level executives in the banking sector, further strengthening the leadership and management capabilities within the industry.

Bangladesh’s banking sector began to deteriorate in 2010 when the government introduced a single-digit 9 percent interest rate for lending, according to a White Paper. Titled “White Paper on the State of the Bangladesh Economy”, the report was unveiled at a press conference on Monday. As of last June, the total assets of banks in the financial sector stood at Tk 25.46 lakh crore, representing 47 percent of the country's gross domestic product (GDP). Bank deposits amounted to Tk 18.41 lakh crore, or 34 percent of GDP. White Paper prepared through inclusive, consultative process: Debapriya Between 2001 and 2019, GDP growth doubled, underlining the critical importance of private sector lending. However, the banking sector, which had been gradually strengthening, began to spiral out of control primarily after 2010. The report attributes this decline to temporary and hasty policy changes by regulatory agencies and the government, which resulted in misguided lending practices. Significant policy shifts included fixing the market-based interest rate at 9 percent, introducing the smart rate system, providing collateral-free loans during the Covid-19 pandemic, and adopting the crawling peg system in the foreign exchange rate regime. In April 2020, following discussions with private bank entrepreneurs, the then Finance Minister AHM Mustafa Kamal announced the 9 percent interest rate cap on bank loans. At that time, interest rates in the banking sector had reached as high as 22 percent. Excess capacity payments to exceed Tk 36,000 cr in 15 years: White Paper After entering into a loan agreement with the International Monetary Fund (IMF) early last year amidst a financial crisis, Bangladesh Bank gradually began increasing interest rates. The White Paper reveals that the fixed rate was, in effect, market-based only on paper. It also highlights a turning point in governance, when the Awami League government was ousted during the student-led public uprising on August 5, paving the way for an interim administration. Following the change in government, the leadership of financial regulatory agencies was overhauled. The implementation of IMF conditions and the elimination of previous policies commenced. To address the poor state of the financial sector, the central bank has raised its policy rate by 525 basis points since May 2022. White Paper: Debapriya focuses on 2-year economic plan The current policy rate stands at 10 percent, which is expected to help control inflation. The average lending rate in the banking sector is now around 12 percent, with some cases reaching 14 percent. Despite the introduction of a single-digit interest rate, the report reveals that most loans issued after 2010 have turned into defaults. The ratio of defaulted loans currently stands at 12.5 percent, amounting to Tk 2.85 lakh crore.

The central bank of Bangladesh has been forced to issue a statement to clear the air, as it were, of the confusion arising out of its initiative to bring about consolidation in the country's ailing banking sector. As a necessary part of the process aimed at reducing the number of banks in the country, the sector is going to witness a number of mergers between previously disparate entities in the coming days. Top execs of merging bank cannot hold posts at acquiring entity: Bangladesh Bank Five merger proposals have already been received and  are expected to be approved by the end of 2024. They involve around 11 institutions, and if completed as proposed, would reduce the number of banks in Bangladesh by 6 - around 10% of the total. Yet the unprecedented nature of these moves in the banking sector, where there is no previous record of two Bangladeshi banks having merged, has led to a state of panic and confusion among members of the public, to the extent that people are reportedly withdrawing their deposits from certain banks, said sources at some respected banks. Bangladesh Bank auctions gold for the first time in 16 years They said most of the depositors are suffering from the dilemma of whether or not to keep money in the bank. Some are withdrawing their money from the banks due to 'fear'. Bangladesh Bank was forced to address the issue in its statement today, asserting that individual as well as institutional depositors' money will remain fully safe and secure in banks during the merger process. Noticing different news and social media posts, the central bank said accountholders of two merging banks will be able to maintain their respective accounts as before even after the completion of the merger. Bangladesh Bank issues detailed directive on appointment of MD, CEO for NBFIs The merger process will be completed based on the consent of the entrepreneurial directors, current boards, and common shareholders of the banks covered by the merger, said the statement.

The women employment in the banking sector increased by 1407 in July-December period of 2023, and the overall perrcentage of women employees at banks stood at 16.37 percent in Bangladesh. Meanwhile just 13.51% of board members in the banks are women.  Bangladesh Bank’s (BB’s) latest report on gender equality revealed this information. There are 33346 women employees in 61 banks in the country, which is 16.37 percent of the total employees of banks, according to the report. The BB report shows that among the scheduled banks in 2023, 43 private commercial banks have the highest number of women employees 22,248, which is 16.32 percent of the total employees. Foreign commercial banks have the highest proportion of female officers, 24.18 percent as compared to other banks. In the period July-December 2023, the participation of women as board members was only 13.51 percent. Among them, foreign commercial banks have the highest female board member participation rate at 17.54 percent. Read more: Bangladesh's women empowerment showcased in Myanmar On the other hand, there is no participation of women board members of specialized commercial banks in the discussed period. According to the reports submitted by banks during the period July-December 2023 shows that the participation rate of women employees is higher at the entry-level 17.04 percent and mid-level 15.79 percent than at the higher levels 9.36 percent. Analysis of the obtained data shows that the participation of women in the banking sector is high at the initial stage. At the same time, the participation rate of female employees under thirty years of age 20.99 percent is more than double that of female officers above 9.58 percent in scheduled banks. Bangladesh’s place has improved by 12 steps in the gender gap report of the World Economic Forum (WEF) in 2023, as women's employment increased in the country. The BB report shows that Bangladesh is holding the 59th position in 2023 improving from 71st in 2022 in the gender gap of WEF, among 146 countries in the world. Read more: PM Hasina keen to create more scopes for women in every sector: Nasrul Hamid Executive Director of CDP Dr. Fahmida Khatun said that women's employment is usually increasing with the developing socio-economic scenario of the country and decreasing the ratio of women's employment does not match that calculation. She focused on the need to study why the ratio of women employment has been decreasing in the banking sector. Bangladesh Bank’s spokesperson Mezbaul Haque told UNB that women's employment has increased in the banking sector following the central bank’s policy to reduce the gender gap in banks and financial institutions. The central bank prefers women both in employment and entrepreneurship development. Loan disbursement and interest incentives have been given to women encouraging them involved in financial inclusion. The BB is still working to ensure a sound environment in the workplace of banks. Facilities including maternity leave and daycare opportunities for women’s employees have increased, he said. Read more: Proven Passive Income Ideas for Women in 2024

Independent MP AK Azad on Monday (February 12, 2024) demanded a list of those who have laundered money abroad taking loans from banks be placed in Parliament. Azad, who was elected MP for the first time, came up with the demand while participating in the discussion on the thanksgiving motion on the President’s speech. He said that Prime Minister Sheikh Hasina is totally against corruption and Awami League's manifesto also cited that. “First of all, good governance will have to be established in the banking sector,” Azad said. Read more: Bangladesh Bank sets an 11-point roadmap to realise default loans Welcoming Bangladesh Bank's roadmap for reforming the banking sector, Azad, also President of Newspapers Owners Association of Bangladesh (NOAB), said the amount of defaulted loans in Bangladesh is around Tk 1,45,633 crore. “But in reality, the amount is much more. But through write off, the amount of debt is shown less. Those who have taken loans and invested in factories and failed to repay, may be exempted subject to investigation,” he said. He demanded to bring to justice those who did not invest loan money in any business, and instead laundered the money. “They made home at Begum Para, and second homes. Their list should be published in the parliament,” he demanded. Read more: Bank MDs working under increased stress due to default loans, board interference: Experts He also commented that Bangabandhu's dream will not be realised unless they are brought under the law. The independent MP said that those who looted banks are responsible for the rise in commodity prices and inflation. Azad said that he wants to be accountable to the countrymen and voters through this parliament. Azad also said he wants to make the parliament effective and lively through constructive criticism of the government. He expected cooperation of the Speaker in this regard. Read more: Businesses should get opportunities to turn around before wholesale declaration of loan defaulters: FBCCI President

Prime Minister Sheikh Hasina on Sunday instructed to inform her about the current situation of Bangladesh’s banking sector. She gave the instruction during the Secretaries’ Committee Meeting, Cabinet Secretary Khandker Anwarul Islam told UNB. Read more: Complete ongoing prioritised projects: PM directs secretaries Regarding the banking sector, the Cabinet Secretary said the issue was discussed indirectly at the meeting and instructions were given to the Banking and Finance Division. “There’s a lot of talk (over the banking sector), let us know what the real scenario is soon,” the Cabinet Secretary  quoted the PM as saying. Read more: After Bangladesh assisted Sri Lanka with $200mn, many countries made similar requests: PM About recent events concerning Islami Bank, he said some “outsiders” are talking about the state of some banks on YouTube. “Yet, this was not neglected in the meeting. This issue will be looked into as well.”

The capital markets will follow the banking sector's lead in operation during the pandemic of Covid-19. This was informed by the Bangladesh Securities and Exchange Commission (BSEC) against the backdrop of different rumors since news broke of the lockdown to be imposed by the government from Monday next. A notice posted on the official website of the BSEC said: "Capital market will continue operation at the interest of investors in any situation during the pandemic of Covid-19 if the banking activities continue." It said all transactions in the capital market will continue in the interest of investors. Also read: Govt to enforce 7-day lockdown from Monday: Quader It urged the investors to pay no heed to any sort of rumors. According to BSEC sources, if the bank is open in lockdown, the capital market will also be open. This instruction has been given to two stock exchanges (Dhaka and Chittagong). Also read: Covid-19: Bangladesh sees 5,638 cases, 58 more deaths They said, the commission has instructed DSE to keep the capital market open if banks are open. The capital market will operate utilising smaller shifts and work-from-home facilities. Earlier, from March 26 to May 31 last year, transactions in the capital market were closed due to the outbreak of coronavirus.

Humaira Azam is set to become the first female managing director of a private bank in Bangladesh when she assumes the role of Trust Bank Limited. She is currently serving as the Additional Managing Director (AMD) at the bank. Banking industry sources said the Trust Bank board of directors in a meeting on Monday selected Humaira for the post of MD and forwarded a proposal to the central bank in this regard. Read Nine public sector banks hold 27 percent assets, deposits in banking sector The appointment will be made after getting approval from the Bangladesh Bank. Humaira served as the first female MD in the IPDC Finance, a private financial institution.  The Dhaka University International Relations graduate started her banking career in 1990 as a trainee officer at ANZ Grindlays Bank.  In her long career, she served different foreign and local banks and financial institutions in various capacities. Read Banks can declare the highest 30% dividend. Humaira joined HSBC Bangladesh in 1996 and switched to Standard Chartered Bank in 2002. In April 2009, she took over as the MD of the financial institution IPDC where she turned the organization into a profitable one. She joined Bank Asia in January 2012 as the Chief Risk Management Officer. In March 2016, she took over as the Chief Risk Management Officer and Additional MD at the Trust Bank. Earlier, Prabasikalyan Bank got the first woman MD in the state-owned banking sector.  Read Legendary Women in Bangladesh with Pioneering Contribution in Diverse Fields.