For decades, the readymade garment (RMG) industry has served as the primary engine of the Bangladeshi economy. Its contribution to creating employment for millions, earning vast foreign exchange, and driving industrial expansion is undeniable.
However, in recent times, entrepreneurs have been pushed to the brink by a combination of bank loans, financial crises, and administrative hurdles.
Factories are closing, owners are collapsing under the mental strain of debt, and in some tragic instances, the pressure has led to untimely deaths—sparking deep concern across the business community.
Businesses suffer from aggressive bank recovery policiesBusiness leaders argue that instead of providing necessary support to sustain industries facing temporary liquidity crises, banks are increasingly adopting a rigid and aggressive stance. This lack of flexibility often makes it impossible for these enterprises to survive.
A stark example of this crisis is Denison Attires Limited, an export-oriented garment factory located in the Fatullah Police Line area of Narayanganj.
The owner, Saidul Haque, shared his ordeal with Bangla Tribune, explaining that many institutions fell into financial distress when global demand plummeted during the pandemic.
Haque maintains that his institution could have been saved with even a modest amount of financial assistance. Specifically, he noted that a loan of just Tk2 crore would have allowed him to pay workers' wages and keep the factory operational, but the bank refused to cooperate.
The details of his financial struggle highlight systemic issues in banking practices. Saidul Haque had taken a total loan of Tk2.10 crore from Standard Bank and had consistently repaid portions of it over time. He alleges that while the bank collected over Tk1.50 crore in interest and various charges, these payments were never adjusted against the principal amount.
Instead, the bank recorded the entire sum as interest. This accounting method meant that despite regular payments, his core debt remained unchanged, leading to the eventual collapse of the business.
The situation worsened when the bank suspended Haque's Letter of Credit (LC) facilities.
In the export industry, LCs are the lifeblood of operations, essential for everything from importing raw materials to production and shipping.
Without this banking support, production ground to a halt, leading to the cancellation of several orders from foreign buyers and damaging long-term business relationships.
Haque lamented that instead of helping the factory survive during its darkest hour, the bank subjected him to various forms of pressure and harassment.
The consensus among the business community is that the shock of the Covid-19 pandemic left many institutions financially fragile.
The failure of banks to provide adequate support during this recovery phase has proven fatal for many.
Industrialists point out that the current structure of bank loans—characterized by complex interest calculations and mounting service charges—creates an unbearable burden.
When coupled with administrative bottlenecks and the rigid regulations of various government departments, the environment for conducting business has become increasingly hostile.
The human cost
The tragedy of the debt crisis was recently highlighted by the death of Mohiuddin, a veteran garment entrepreneur.
As the owner of the Dhaka-based Moonlux and a figure in the RMG sector for nearly four decades, Mohiuddin’s downfall began when several export shipments were canceled during the pandemic.
Lacking bank support, he was forced to shut down his factory.
Sources close to him reveal that he spent the last three years navigating the complex bureaucracies of the VAT office, Customs Bond, and banks to resolve his issues.
The relentless pressure from creditors and administrative complications led to severe mental distress and a decline in his physical health.
Tragically, on March 13, he passed away following a heart attack, an event that has sent shockwaves through the industry.
Even top-tier industrial groups—entities that provide employment to hundreds of thousands and contribute massive revenue to the government—are finding themselves ignored by banks during crises.
On October 7, 2025, the Bangladesh Bank announced a policy allowing unintentional loan defaulters to reschedule their debts with a 2% down payment.
However, entrepreneurs claim that banks are hiding behind a web of complex conditions to deny this facility.
This lack of cooperation is a "lose-lose" scenario: the banks fail to recover funds, industrial groups collapse, millions of workers face job insecurity, and government revenue declines.
Several leading export-oriented groups, including Thermex Group, Orion Group, and Rupayan Group, have reportedly become victims of arbitrary banking decisions.
Despite their multi-crore investments, some banks—specifically Social Islami Bank (SIBL) and Bank Asia—are allegedly refusing to honor the 2% down payment rescheduling agreement reached in tripartite meetings mediated by the Bangladesh Bank.
An official from one industrial group, speaking on condition of anonymity, stated that this biased behavior is making it impossible to keep businesses solvent and protect workers' jobs.
Economists warn that when these large-scale industries fail, the ripple effect on employment and export earnings damages the entire national economy.
While Bangladesh Bank's Executive Director, Arif Hossain Khan, noted that the policy support committee is no longer active and banks are now free to offer low-down-payment rescheduling based on their own assessments, the role of the banking system remains under intense scrutiny.
