Home loan is an instrument for realising personal aspirations

City Bank MD tells FE

FE Team | Published: Wednesday, 29 April 2026

The home loan sector has evolved into a key driver of the national economy. A significant shift is under way, as the aspiration to own a home has become as strong in semi-urban and rural areas as in Dhaka and other metropolitan centres. This demand is being fuelled by a growing middle class seeking improved living standards.
"At City Bank, our portfolio of more than Tk 20 billion shows that when you understand these changing demographics, housing remains one of the safest and most sustainable avenues for deploying capital," Mashrur Arefin, Chief Executive Officer (CEO) and managing director of City Bank PLC, told the Financial Express recently.
He said the market is undergoing structural change, increasingly favouring institutions with the capacity to manage long-term risks and ensure legal clarity in property transactions.
The central bank's decision to raise the housing loan ceiling to Tk 40 million for well-performing banks marks a turning point.
The City Bank CEO said: "It allows lenders to keep pace with rising construction costs while extending credit beyond major cities into regional and affordable housing projects".
"At City Bank, we view a customer's profile as a complete narrative rather than a set of isolated data points. While income and credit history remain fundamental, we also assess financial discipline, personal background and future potential," he said.
According to the chief executive, the market is shaped by two distinct borrower segments. The most consistent demand continues to come from salaried professionals and individuals in specialised occupations such as medicine, accounting and engineering, whose stable incomes align with long-term mortgage commitments.
"At the same time, there is a visible surge in demand from entrepreneurs," he added.
Geographically, while Dhaka and Chattogram remain the main centres of lending activity, banks are increasingly being judged by their ability to reach semi-urban and rural markets.
Loan repayment performance remains a key indicator of credit discipline.
While the broader banking sector has faced significant stress, the housing finance segment has remained relatively resilient.
"Industry data shows that although classified loans have risen in other portfolios, default rates in home finance among disciplined banks have remained within a manageable range," he said.
The central bank's recent policy decision, he added, reflects recognition of this performance. By extending the Tk 40 million ceiling to institutions maintaining strong portfolio quality, the regulator is effectively rewarding financial discipline.
"We are proud to be among the beneficiaries of this policy, as our home finance non-performing loans remain well below the 5 per cent threshold required for the maximum ceiling," he said.
This disciplined framework, he noted, helps distinguish between genuine financial hardship and wilful default, ensuring that credit is directed to responsible borrowers.
"It demonstrates that with strong governance, it is possible to achieve growth without compromising the safety of funds," he said.
He added that a home loan is more than a financial product; it is an instrument for realising personal aspirations.
"The only real risk is the long-term discipline required, but we find that this often encourages greater financial responsibility over time," he said.
For banks, he said, the benefit is a secured and stable portfolio that enables long-term customer relationships.
"It gives us both depth and breadth to serve clients across the country. Ultimately, it is an alignment of interests: the bank builds a low-risk portfolio, and the customer builds a permanent asset and legacy."