The government has set aside around Tk 40,000 crore for the next fiscal year to recapitalise financially distressed banks, Finance Minister Amir Khosru Mahmud Chowdhury said yesterday, describing the move as a key part of broader efforts to restore stability and public confidence in the banking sector.
Presenting the national budget for FY2026-27 in parliament, the finance minister said repairing the banking system is critical to sustaining economic recovery, reviving private investment and ensuring financial stability.
The recapitalisation programme is aimed at strengthening weak banks burdened by rising non-performing loans, governance shortcomings and capital shortfalls, he said.
“A key focus is to restore confidence in the banking and financial sector by bringing discipline and stability to the sector,” Khosru told parliament.
According to the minister, the government’s strategy goes beyond injecting capital into troubled lenders. The reform programme also includes tighter supervision, stronger governance standards and greater accountability in banking operations.
He said efforts are underway to reduce defaulted loans, improve transparency in loan approvals and rescheduling, and strengthen oversight of bank management.
As part of the reform agenda, the government plans to introduce a risk-based supervisory framework aligned with international standards. Weak banks will undergo restructuring where necessary, while recapitalisation and management reforms will be used to restore financial health and protect depositors’ interests.
The minister said initiatives have also been taken to ensure the return of depositors’ funds and rebuild confidence in the financial system.
Khosru further said the government has intensified efforts to recover funds allegedly laundered abroad and has moved to curb political influence in banking operations.
He noted that legal amendments have already been enacted to reduce undue family control and strengthen governance in the banking sector.
Looking ahead, the government plans to align the sector with international best practices by enforcing stronger risk management systems, capital adequacy requirements and corporate governance standards to make banks more resilient and competitive.
The finance minister also highlighted financial inclusion as a priority, saying access to finance would be expanded for women, young entrepreneurs and underserved communities to ensure broader participation in economic activity.
The banking sector reform programme is one of the government’s key economic priorities, as policymakers seek to restore confidence in the financial system and improve the flow of credit needed to support investment and growth.