Bangladesh Bank will launch Asset Quality Reviews of eleven troubled banks starting in January 2027, expanding a program that has already reshaped several lenders.
Scope and timeline of the new reviews
The central bank invited qualified international consulting and audit firms to submit expressions of interest by 31 August 2026, according to a notice published in national newspapers. Selected firms must begin work in January 2027 and finish the assignment within 120 calendar days of signing the contract.
Each review will cover at least 80 % of a bank’s total assets, checking compliance with regulations on provisioning, large exposures and related‑party identification. Auditors will verify the data submitted and independently assess collateral values where needed.
Other required analyses include identifying wilful defaulters and connected lending, testing regulatory and Tier 1 capital adequacy against domestic and international standards, and running stress tests for baseline and adverse macro‑economic scenarios over the next three years. Liquidity indicators such as the Liquidity Coverage Ratio and Net Stable Funding Ratio will also be examined, and forensic examinations will look for fraud or unlawful lending.
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Firms must have at least 15 years of professional experience, with a minimum of ten years in Asset Quality Reviews, banking supervision or credit‑risk review. Multidisciplinary teams are expected to include chartered accountants, Financial Risk Managers, Certified Anti‑Money Laundering Specialists, or Basel III specialists.
Banks slated for review
Officials who asked to remain anonymous provided the names of the eleven institutions: Islami Bank Bangladesh, Al‑Arafah Islami Bank, National Bank, Bangladesh Commerce Bank, United Commercial Bank, IFIC Bank, AB Bank, Premier Bank, NRB Commercial Bank, NRB Bank and Meghna Bank. All have been identified as having high non‑performing loans or capital shortfalls, issues that have plagued the sector for years.
Bangladesh Bank Executive Director Arief Hossain Khan said the central bank intends to “gradually expand the AQR programme” after completing reviews of six banks earlier this decade. “We will first assess the financial health of each bank and then determine what measures are required in each case,” he told reporters.
It is worth noting that the World Bank‑financed Financial Sector Support Project‑II will fund the initiative, aiming to boost the sector’s resilience and improve risk management practices.
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Background of prior Asset Quality Reviews
Bangladesh Bank previously appointed Ernst & Young and KPMG to conduct Asset Quality Reviews of six banks. Ernst & Young examined Exim Bank, Social Islami Bank and ICB Islami Bank, while KPMG assessed First Security Islami Bank, Global Islami Bank and Union Bank. Following those reviews, five banks were merged into the newly created Sammilito Islami Bank. ICB Islami Bank continues under an administrator appointed by the central bank.
Current state of Bangladesh’s banking sector
Bangladesh’s banking sector carries non‑performing loans of Tk5.89 lakh crore, representing 32.26 % of total outstanding loans of Tk18.25 lakh crore. Of the 61 banks operating, 17 have non‑performing loan ratios above 50 %, and 23 face a combined capital shortfall of Tk2.82 lakh crore.
Under the government’s plan, Sammilito Islami Bank will have a paid‑up capital of Tk35 000 crore, with Tk20 000 crore supplied by the government and the remaining Tk15 000 crore to be raised through a share or equity structure involving depositors. The central bank has already disbursed Tk3 792 crore from the Insurance Trust Fund and stands ready to provide further support as needed.
Administrators at the remaining banks will be removed in phases, a move intended to restore depositor confidence and strengthen overall sector stability.