Finance minister links banking stability to recapitalisation, depositor confidence

The minister says efforts are under way to inject fresh capital into banks

Stability in Bangladesh's troubled banking sector will depend on restoring depositor confidence, Finance Minister Amir Khosru Mahmud Chowdhury has said.

Speaking at the Economic Reporters Forum (ERF) office in Paltan on Tuesday, he said efforts were under way to inject fresh capital into banks as part of a broader plan to stabilise the sector.

“The instability will ease when banks are adequately capitalised, when depositors can get their money back, regain confidence, and begin depositing again. Once banks can resume lending, the cycle can start functioning normally,” he said.

The finance minister also described the tailoring of the new budget as a major challenge, saying the BNP government had only around six weeks to draft it after taking office.

“A budget process normally takes at least six months. Preparing one within a month and a half is extremely difficult,” he said.

He added that the government had inherited a fragile economic situation and was simultaneously trying to restore stability and lay the groundwork for future growth.

Despite criticism over the size of the proposed budget and concerns about implementation capacity, Khosru defended the government's approach, arguing that significant measures were needed to pull the economy out of its current difficulties.

“We have been continuously brainstorming and debating how to move forward. We will make our best effort to bring the economy out of this constrained situation,” he said.

To improve implementation and monitoring, the finance minister said every ministry and government office, including the Prime Minister’s Office, would maintain dashboards tracking the progress of individual projects.

Project performance will be reviewed daily through the system, while delays will be investigated and action taken where necessary, he said.