Sonali Bank has been advised to enhance advance-deposit ratio by lending to productive sectors instead of keeping funds idle as the largest bank's AD proportion is said to be at the lowest level among the state-owned banks.
The government direction was given Sunday at a meeting between officials of the Financial Institutions Division (FID) and the board of directors and top management of the bank at Bangladesh Secretariat, officials said, as banking-sector stocktaking is underway.
The FID is holding meetings with the authorities of the state-run commercial banks for a review of their overall financial and operational situation, recent progress, existing problems and prospects, and ongoing banking-sector reforms. FID secretary Nazma Mobarek presides over the meetings.
Data show the AD ratio of the largest state-owned bank remained at around 58.30 at the end of December 2025, down from 60.11 in the previous year. In 2023, the AD ratio was 66.93 and 59.59 in 2022.
Sources said the meeting viewed that Sonali Bank's credit growth was lower compared to its deposit growth, which may indicate liquidity strengths.
However, the meeting raised question whether the bank could be able to deploy its vast low-cost deposit base into productive assets with sufficient efficiency.
Officials have said Sonali Bank's major advantage is it plays role as government's treasury bank. The current account and savings account (CASA) is a major competitive advantage of the bank.
"However, the true economic value of this advantage will only be realised when it is used to fund safe, profitable, and productive sectors," said one official.
The meting also raised question how competitive the Sonali Bank is by excluding government business and CASA advantage, sources said.
The bank was told to strengthen its own commercial franchise through customer service, digital banking, corporate banking, CMSME financing, trade finance, remittance, treasury management, and new financial products.
Government business will strengthen the bank's foundation. However, the bank's internal efficiency, innovation, and competitive capability must also be enhanced equally, the profit-making bank's management has been suggested.
Sources said the meeting appreciated Sonali Bank's enhanced profitability in the recent years.
However, the meeting emphasised examining how much of the profit comes from core banking operations, how much profit it can make by excluding the benefit of low-cost government deposits, how much the return remains after proper provisioning, and whether the income is sufficient relative to the bank's vast assets and branch network, sources said.
The meeting also discussed that Sonali Bank's recent non-performing loan (NPL) rate is around 16.4 per cent.
The NPL rate is lower compared to other state-owned banks, the meeting was told, but, at the same time, it remained significantly high by the standards of a healthy and efficient bank.
The bank has been asked to set 12 to 24 months' priorities for lowering NPLs and increasing cash recovery from classified and written-off loans, and disbursing high-quality new loans and gradually bringing the AD ratio to a logical level, sources said.
Sonali Bank managing director Shawkat Ali Khan did not respond to repeated calls to make a comment on the FID's observations.
FID secretary Nazma Mobarek told The Financial Express the state-owned commercial banks have large deposit base but a big portion remains idle.
"We asked banks to enhance loan disbursement, but, at the same time, not to compromise on asset quality," she said.
