Bangladesh Bank Governor Ahsan H. Mansur has revealed that the government plans to reduce the number of state-owned banks to just two, with the remaining banks to be merged. He stated that over the years, between $20 and $25 billion has reportedly been siphoned out of the country due to nepotism and irregularities in the banking sector.
Speaking at a public lecture titled “Banking Sector: Current Challenges and Future Prospects” at the central auditorium of Jagannath University on Wednesday (21 January), Governor Mansur said the country currently has 61 banks—far more than necessary. “Considering the realities, 10 to 15 banks would suffice. Reducing the number of banks would make ensuring good governance easier. The government plans to retain two state-owned banks while merging the rest,” he added.
He warned that mismanagement, nepotism, and lack of governance have led to nearly BDT 3 lakh crore being drained from the banking sector, much of which may have been laundered abroad. Proposals to merge the remaining state banks have already been submitted to the government.
Governor Mansur stressed that banking decisions must not be influenced by individual interests. He emphasized the need for reforms across the sector, noting that the default loan rate is expected to fall to 25% by March. He also cautioned that without the revised Bangladesh Bank ordinance, political interference could return.
Additionally, Bangladesh Bank is creating a bank resolution fund, aiming to collect BDT 30,000–40,000 crore, which will also include non-bank financial institutions under the resolution framework.
Highlighting the importance of a cashless society, the governor noted that cash transactions are a major source of tax evasion. Moving toward cashless systems could generate an additional BDT 1.5–2 lakh crore in annual revenue, and he urged every student to be brought under formal banking services.
Jagannath University Vice-Chancellor Prof. Dr. Rezaul Karim praised the governor’s role in reviving a nearly collapsed sector and stressed the fragile state of the banking industry. Prof. Dr. Sharif Mosharraf Hossain, chairman of the Economics Department, added that rising default loans have reduced bank lending, hampering investment, and predicted stricter monitoring of the sector in the future.
