Major banking sector reforms announced to restore public trust

Establishing discipline in the banking and financial sector and restoring public trust has been identified as one of the government's key priorities in its medium-term economic strategy to aid economic recovery and sustain investment flows.

For this purpose, the government has proposed amending relevant laws to end political appointments and interference in bank management and to keep the sector free from family and group influence.

Finance Minister Amir Khosru Mahmud Chowdhury made the announcement while presenting the proposed budget for the 2026-27 fiscal year in the National Parliament on Thursday, June 11.

In his budget speech, he said initiatives have been taken to reduce non-performing loans, bring transparency to loan approval and rescheduling processes, and strengthen accountability in bank management to ensure stability in the banking sector.

The finance minister further said a risk-based supervision system will be introduced to restructure the financial capacity of weak banks. Recapitalisation and management reform programmes will also be implemented as needed. The government is spending approximately Tk 40,000 crore this fiscal year to recapitalise weak banks.

He said steps have been taken to restructure banks to ensure that depositors can recover their money. Effective measures are also being implemented to bring back money laundered abroad.

Amir Khasru emphasised ensuring international standard risk management, adequate capital reserves and strong corporate governance in the banking sector. He said these measures will help make financial institutions more stable, efficient and competitive in the long term.

The minister said financial inclusion will be expanded to increase financing opportunities for women, young entrepreneurs and marginalised communities. This will ensure broader participation in economic activities and help achieve inclusive growth.

He expressed hope that successful implementation of the ongoing reform programme will restore public trust in the banking and financial sector and accelerate economic recovery and investment flows.