Banking sector’s loan irregularities hamper broader recovery efforts: MCCI

The Metropolitan Chamber of Commerce and Industry (MCCI) has said problems in the banking sector, including widespread loan irregularities, have hampered broader recovery efforts of the economy.

"Longstanding problems in the banking sector, including regulatory gaps and widespread loan irregularities, have hampered broader recovery efforts [of the economy]," the business lobby stated in its quarterly review of the "Economic Situation in Bangladesh April - June 2025 (Q4 of FY25)", published on Tuesday (12 August).

The chamber, however, acknowledged the government's effort to recover, saying, "Though growth remains sluggish, the quarter under review [Q4 of FY25] showed early signs of a turnaround." 

Increased export earnings and remittance inflows have helped stabilise foreign currency reserves and inject some vitality into the economy, the review says.

"Ongoing reforms aimed at improving financial governance and restoring public confidence in banks will be key to reviving growth and ensuring long-term economic stability," the review report reads.    

The MCCI said several structural issues continue to weigh heavily on recovery, including weak private sector credit growth, declining imports of capital machinery, and falling investment levels have all contributed to slower economic momentum.

The fiscal year 2024-25 (FY25) closed with mixed outcomes for Bangladesh's economy, the chamber stated.

Quoting recent data from the Bangladesh Bureau of Statistics (BBS), the MCCI stated that the GDP growth in the third quarter edged up to 4.86% from 4.48% in the second quarter, offering a mild sign of improvement. 

It noted that inflation also eased slightly, falling to 8.48% in June. "However, annual average inflation remained steep, averaging 10.03%, well above comfortable levels."