Dhaka Chamber of Commerce & Industry (DCCI) expresses concern as Bangladesh Bank has continued its contractionary monetary policy, while private sector credit growth dropped to just 6.4% in June 2025, the lowest in 22 years, signaling sluggish investment and industrial activities.
However, this downturn in credit growth to private sector is exacerbated by broader uncertainty in the business environment, unstable law and order situation, limited energy supply, fueled by tightened monetary policy by the Central Bank, said DCCI.
"On the other hand, the alarming rise in NPLs, which reached Tk 5.3 lakh crore and now exceeds 27.09% of the total outstanding loans, presents a serious threat to financial stability and erodes investors’ confidence", DCCI also said in an instant reaction.
It mentions that despite this downward business confidence, the policy rateremains unchanged at 10%, aiming to lower the inflation.
Though inflation has declined only marginally, this persistently high policy rate continues to impose a heavy borrowing burden, especially on CMSMEs and productive sectors. For the next six months, the private sector credit growth target has been set at 7.2%, down from 9.8% in the previous monetary policy, further highlighting the shrinking credit flow and making it increasingly difficult for businesses to sustain operation.
The increased public sector credit growth target to 20.4% which apparentlycreating fiscal burden on economy and mass taxpayers, reducing the private sector credit space and resulting into economic slowdown.
In light of these challenges, DCCI urges Bangladesh Bank to enhance credit flow to businesses through simplified terms and lower interest rates. Italso recommends a six-month extension in the loan classification timeline to support good borrowers in recovery without immediate default risk.
To ensure sustainable economic recovery, Dhaka Chamber calls for urgent structural reforms in the financial sector, greater transparency in credit allocation and strict monitoring to ensure enough liquidity.
A more flexible, inclusive, and sector-responsive monetary policy, aligned with fiscal disciplineis essential to restore confidence, spur investment, and uphold macroeconomic stability in the days come.
