State-owned Sonali Bank has lent Tk 7,000 crore to National Bank PLC, with Bangladesh Bank providing a 100 percent guarantee on the three-month loan, according to The Daily Star. The transaction has been completed at an interest rate of 10 percent, Md Shawkat Ali Khan, managing director of Sonali Bank, confirmed.
The rescue aims to allow National Bank to meet customer withdrawal demands after the private lender faced a liquidity crisis. National Bank's chairman, Prof Melita Mehjabeen, said the bank would resume full services on October 15 and had already received nearly 7,000 withdrawal requests as of the reporting date. "We are making arrangements to ensure that funds reach every branch by tomorrow. From the day after tomorrow, we will try to provide services to all our customers," Melita said.
Why Bangladesh Bank is backing a private bank's debt
Bangladesh Bank's guarantee shifts all repayment risk to the central bank, which holds public money. If National Bank cannot repay Sonali Bank within three months, the central bank will settle the debt. "We face no risk here because Bangladesh Bank is providing the guarantee," Shawkat said. "If National Bank fails to repay the loan within the stipulated period, the central bank will repay Sonali Bank."
Bangladesh Bank Governor Md Mostaqur Rahman met with National Bank's executives to discuss the support, according to The Daily Star. The central bank's stated priority is protecting depositors. "Depositors must not be turned away under any circumstances. From October 15, they will get their money back. In this regard, the bank will be provided with liquidity support as needed," BB Executive Director and Spokesperson Arief Hossain Khan said after the meeting.
How deep are National Bank's losses?
National Bank has accumulated losses of nearly Tk 9,000 crore over four years since 2022, according to The Daily Star. In 2025 alone, the bank posted a loss of Tk 2,430 crore, a 41 percent increase from Tk 1,722 crore in the previous year.
The bank's non-performing loans—debt unlikely to be repaid—accounted for 59.69 percent of total outstanding loans at the end of 2025, The Daily Star reported. This ratio is far higher than healthy banking norms and indicates the bank has lost control over its lending portfolio.
National Bank has received uncollateralised liquidity support from Bangladesh Bank over several years amid funding shortages, according to The Daily Star. Four National Bank depositors approached the High Court last month seeking access to their savings, signaling public alarm over the bank's stability. One of Bangladesh's oldest private lenders, National Bank has faced mounting pressures from its deteriorating asset quality.
What happens if National Bank cannot repay?
The three-month timeline creates immediate uncertainty. With cumulative losses of Tk 9,000 crore since 2022 and a loan of Tk 7,000 crore, National Bank faces a gap that the emergency funds do not fully cover. The central bank has not publicly outlined what will happen if National Bank cannot repay Sonali Bank when the loan matures.
Shawkat stressed that National Bank must use the funds correctly. "The National Bank needs to use this money properly. It must be utilised for the right purposes," he said. Melita said the central bank instructed National Bank to reopen and resume operations but had not specified the exact mechanism through which additional assistance would be provided beyond this loan.
The rescue reveals the depth of National Bank's crisis but leaves open whether the emergency injection will restore the bank to health or merely delay a larger intervention. Whether other private banks face similar liquidity pressures and what regulatory failures allowed National Bank's non-performing loans to reach 59.69 percent of its portfolio remain unanswered.