7.1. Banking Sector Overview

In 2025, Bangladesh’s banking sector comprises state-owned commercial banks (SOCBs), specialized banks (SDBs), private commercial banks (PCBs), and foreign commercial banks (FCBs). SOCBs, fully or majority government-owned, account for less than 30% of total banking assets and have higher non-performing loan ratios compared to private banks. S&P classifies Bangladesh’s banking sector risk as ‘9’ out of 10, indicating significant vulnerabilities. The sector faces challenges such as weak profitability, high inflation, and a volatile exchange rate. The central bank’s independence is limited by multiple mandates and underdeveloped markets, impacting effective monetary policy implementation. Despite these challenges, projections indicate a net interest income of approximately US$38.47 billion in 2025, with traditional commercial banking being the dominant player.