Thirteen Years After the Bacchu Scandal, BASIC Bank Still Can't Climb Out of Its Bad Loan Hole

More than thirteen years after Sheikh Abdul Hye Bachchu left BASIC Bank, the state owned lender still cannot get out from under the damage he did. Fresh figures as of September 12, 2026 show 64.49 percent of the bank's entire loan book, or Tk8,153 crore, is now classified as bad, non performing loans so large that the bank is running a capital shortfall of Tk5,148 crore and a provisioning gap of Tk5,051 crore against what regulators say it should be holding in reserve. BASIC's own chairman admits the bank is still, in his words, struggling to overcome the impact of a scandal most Bangladeshis assumed had been dealt with years ago.

The scale of the original damage is now well documented. Between December 2009 and November 2012, under Bachchu's chairmanship, BASIC Bank disbursed roughly Tk4,424.93 crore in loans later found to involve serious irregularities, money that went out the door with weak collateral, inflated valuations and, investigators later found, political pressure behind many of the approvals. The Anti Corruption Commission has spent over a decade investigating the case in pieces, but recovery has moved far slower than the lending did.

The Numbers Today

BASIC is not the only state owned bank carrying a heavy bad loan burden, but its problem is proportionally the worst of the five. Bangladesh Bank data for the first half of this year shows non performing loans across the five state owned banks, Sonali, Janata, Agrani, Rupali and BASIC, rose by a combined Tk6,304 crore, pushing their total bad debt to roughly Tk151,000 crore. BASIC is the smallest of the five by loan book size, which is exactly why its 64.49 percent ratio stands out so starkly against the others.

Bank	Non Performing Loans (H1 2026)	Six Month Change
Janata Bank	Tk75,558 crore	Largest absolute burden
Agrani Bank	Tk32,133 crore	Up Tk3,518 crore
Sonali Bank	Tk15,710 crore	Slight reduction
BASIC Bank	Tk8,153 crore	Down Tk102 crore, but still 64.49% of its book
Rupali Bank	Not fully disclosed	Included in Tk6,304cr combined rise

That last column matters. BASIC's bad loans actually fell slightly in absolute terms during the first half of the year, by about Tk102 crore, yet the ratio barely moved because the bank's overall loan portfolio has also been shrinking, down to just Tk12,521 crore as of September against deposits of Tk17,224 crore. A bank that is both losing money and shedding its loan book at the same time has very little room to grow its way out of the hole, which is precisely the bind BASIC finds itself in. Losses widened too, from Tk416 crore in 2023 to Tk655 crore by mid September this year.

Why Recovery Has Stalled

BASIC's own recovery drive illustrates just how hard it is to claw money back once a loan has gone bad for over a decade. Cash recovery through September this year totalled only Tk79 crore, with a further Tk229 crore recovered in non cash form, figures that look almost trivial against an Tk8,153 crore bad loan pile. The bank's top 20 defaulters alone owe Tk2,288.25 crore, more than a quarter of all its non performing loans, and of that amount only Tk36.4 crore, roughly 2 percent, has ever been clawed back. Many of these borrowers used the same weak documentation and inflated collateral valuations that defined the original Bachchu era loans, making legal recovery a slow, case by case grind through a court system that bankers across the industry describe as badly backlogged.

This pattern is not unique to BASIC. Across the five state owned banks, Bangladesh Bank and industry analysts have pointed to large corporate borrowers, many with political connections, as the biggest drag on recovery, with Janata Bank alone reporting that roughly 72 percent of its bad loans sit with just 20 large corporate accounts. Weak legal enforcement and chronic under provisioning compound the problem everywhere, but BASIC's case is older, smaller in absolute terms and, proportionally, far worse than any of its peers.

A Three Year Promise

BASIC Bank chairman Helal Ahmed Chowdhury struck a cautiously hopeful note even while acknowledging the scale of the problem. We are still struggling to overcome its impact, he said of the Bachchu era legacy, but added that he believes there is every possibility of turning the bank around within the next three years. That turnaround plan rests heavily on an outside request: Chowdhury has asked the government and other state entities to place Tk5,000 crore in low cost deposits with BASIC, funding that would let the bank lend profitably again without first having to earn its way back to health purely through loan recovery, a process that has so far yielded only a few hundred crore a year.

Whether that request is granted will say a great deal about how much patience the government has left for the slowest moving of its weak banks. BASIC and the Rajshahi Krishi Unnayan Bank have previously been floated as merger candidates, and City Bank held informal talks years ago about absorbing BASIC under a gradual reconstruction model, though neither effort has advanced to a firm agreement. Low cost deposits would at least buy the bank breathing room without forcing a politically difficult merger decision in the near term.

A Sector Wide Headache

BASIC's troubles are a magnified version of a problem that runs across Bangladesh's entire banking system. BD Financial Review has previously reported that the sector's overall classified loan ratio stood at 32.78 percent as of June this year, among the highest in the world, with total bad debt of Tk606,555 crore concentrated heavily among just 5,775 large borrowers nationwide. Bangladesh Bank has since unveiled an 18 month plan to accelerate recovery through bullet payment settlements and one time exit facilities for struggling borrowers, an approach regulators hope will do for the wider system what BASIC alone has been unable to do for itself in over a decade of trying.

A Case That Never Quite Closes

Part of what makes BASIC Bank's situation so stubborn is that the original scandal itself was never resolved in any clean, final sense. The Anti Corruption Commission filed dozens of cases against Bachchu and his associates over the years, but convictions have come slowly and piecemeal, and much of the money that left the bank between 2009 and 2012 was never traced to recoverable assets inside the country. Each new chairman since then has inherited not just a damaged balance sheet but an open ended legal process, one that keeps generating fresh headlines, fresh court dates and fresh disappointment without ever quite delivering the kind of decisive closure that would let the bank draw a clean line under the episode and rebuild from a known starting point.

Banking sector analysts who have watched the case for years argue that BASIC has effectively become the test case for how Bangladesh handles a bank that was deliberately looted rather than merely mismanaged. Unlike ordinary credit risk, where a bank can tighten underwriting standards and gradually improve its loan book, BASIC's core problem is a decade old hole that new lending cannot simply grow around. That is precisely why Chowdhury's request for Tk5,000 crore in low cost deposits matters so much, it is effectively a request for the government to acknowledge that recovery and ordinary banking cannot by themselves fix a wound this size within any reasonable timeframe.

For now, BASIC Bank remains the clearest single illustration of how long the consequences of a lending scandal can linger. A scam that peaked in 2012 is still shaping a bank's balance sheet in 2026, a reminder that in Bangladesh's banking sector, bad loans rarely disappear quickly, they simply get managed, written about and occasionally, if slowly, chipped away at.