National Bank Begins Repaying Depositors, Under 11 New Conditions

National Bank PLC reopened its counters to ordinary business on Thursday, October 15, and started paying out the deposits that around 11,000 customers had been asking for since the previous weekend. Behind that routine-sounding sentence sits a Tk7,000 crore emergency loan, eleven separate conditions attached to it by Bangladesh Bank, and a balance sheet that shows just how far the country's once Sikder family-controlled lender had drifted from basic banking rules.

• About 11,000 customers asked to withdraw a combined Tk2,000 crore between October 11 and 14, before the bank restarted normal payouts.
• State-run Sonali Bank is lending National Bank Tk7,000 crore at 10% interest for three months, under a Bangladesh Bank guarantee.
• As of October 12, National Bank's advance-to-deposit ratio stood at 132%, far above the regulator's 87% ceiling.
• Roughly 66% of the bank's loan book was classified as non-performing as of the end of June.

What actually changed on October 15

For four days before that, National Bank customers who wanted their money out were largely stuck in a queue. Bangladesh Bank had summoned the bank's chairman, Prof Dr Melita Mehjabeen, and its acting managing director to its headquarters on October 8 and told them, in the central bank's own words relayed through a press release, to make sure every branch and ATM booth had enough cash on hand. From October 15, branches, the mobile app, internet banking and counter services were all meant to be fully live again, with savings and current account holders first in line for payment and other categories to follow in later phases. Bangladesh Bank spokesperson Arief Hossain Khan put the instruction bluntly: depositors, he said, "must not be turned away under any circumstances."

Where the Tk7,000 crore actually comes from

The money funding the payouts is not new central bank liquidity in the usual sense. Sonali Bank, the largest state-owned commercial bank, is lending National Bank the Tk7,000 crore directly, at 10% interest over a three-month term, with Bangladesh Bank standing behind the loan as guarantor. That is on top of money National Bank has already drawn from the system: Finance Minister Amir Khosru Mahmud Chowdhury told parliament in June that the bank had received Tk10,568 crore in central bank support, and more recent reporting puts National Bank's cumulative borrowings, including guaranteed funds, at roughly Tk26,000 crore. National Bank is one name on a longer list. Bangladesh Bank has extended about Tk76,000 crore, nearly $6.2 billion, in liquidity support to weak banks in total, led by First Security Islami Bank at Tk15,810 crore, EXIM Bank at Tk12,010 crore and Social Islami Bank at Tk10,841 crore.

The conditions attached to the money

Bangladesh Bank did not hand over the Sonali Bank facility without strings. According to sources familiar with the central bank's directive, eleven separate conditions govern how National Bank can use it. No cash dividends can be paid until the support is fully repaid. None of the funds can go toward repaying deposits held by current or former directors, or toward loans or investments benefiting directors or their associated companies. The money cannot fund new credit approvals, expand existing credit lines, or release previously approved loans that have not yet been disbursed. It cannot settle interbank obligations, buy loan portfolios from other banks, or sit as a deposit with another financial institution. Any foreign currency purchases tied to letters of credit linked to forced loans or trust receipt loans are off limits too. New deposits coming into the bank must be used to improve liquidity and meet obligations to ordinary depositors, operating costs cannot grow more than 5% year over year, and National Bank must file weekly reports to the central bank on exactly how the guaranteed funds are being used.

"Depositors must not be turned away under any circumstances." - Arief Hossain Khan, Bangladesh Bank spokesperson

How the balance sheet got this stretched

The numbers explain why such tight conditions were attached. As of October 12, National Bank held Tk33,515 crore in deposits against Tk43,230 crore in outstanding loans, an advance-to-deposit ratio of 132%, far above the regulatory ceiling of 87%. A bank is only supposed to lend out a defined share of what it holds in deposits; National Bank has been lending out considerably more than it has on hand, which is precisely the gap a liquidity crunch exposes. About 66% of its loan portfolio was non-performing as of the end of June, and the bank lost nearly Tk9,000 crore over the four years since 2022, with its 2025 loss of Tk2,430 crore running 41% higher than 2024's. The root cause, by most accounts, traces back to the Sikder Group's control of the bank from 2009 to 2023, a period the central bank's own communications describe as having caused "extensive financial irregularities" and substantial losses.

Four depositors had already gone to the High Court last month seeking access to their savings, a sign of how long the squeeze had been building before Bangladesh Bank's October 8 intervention. Governor Md Mostaqur Rahman has said protecting depositors remains the regulator's top priority, while National Bank's chairman has told the governor that recent central bank measures and senior management changes are improving the bank's governance and efficiency, a claim the central bank has not independently verified.

What it means for you

If you bank with National Bank, the practical takeaway is that withdrawals should now go through at any branch or ATM, though a bank this stretched is worth watching rather than assuming is fully fixed. Anyone weighing where to keep savings more broadly can compare how this episode fits into the wider pattern of weak-bank support using the FDR rate comparison tool, which makes it easier to see which institutions are offering rates that reflect genuine financial strength rather than a scramble for deposits. For depositors anywhere in the banking system, the broader lesson from National Bank's 132% advance-to-deposit ratio is that a bank's headline interest rate on fixed deposits is not the only number worth checking before committing savings.

What happens next

The Sonali Bank loan carries a three-month term, which means National Bank is meant to have repaid it, or refinanced it, by mid-January 2027. Whether that happens depends largely on whether the bank can slow new withdrawal requests now that routine service has resumed, and on whether the weekly usage reports it must file keep the eleven conditions intact in practice rather than just on paper. Bangladesh Bank's broader Tk76,000 crore liquidity support programme for weak banks suggests National Bank is far from an isolated case, and how this one case is resolved will likely shape how the central bank handles the next bank that runs into the same kind of trouble.