Disbursement of industrial term loans rose by over 26 per cent to Tk 312.47 billion during the October-December period of fiscal year FY 2025-26 over that of the previous quarter.
The amount was Tk 247.71 billion in July-September quarter of FY '26, according to BB data.
However, the quarterly trend in industrial credit flow showed significant volatility in the last fiscal year.
According to the central bank data, the volume of industrial term loans disbursed in the October-December quarter of FY25 was Tk 310.82 billion, significantly up from that of Tk 196.14 billion in January-March FY25, reflecting uneven investment demand across quarters.
On the other hand, the overall industrial term loan disbursement reached Tk 971.38 billion in FY25 compared to Tk 887.38 billion in FY24, suggesting a moderate expansion in long-term industrial financing despite macroeconomic headwinds.
In the July-September quarter of FY 26, industrial term loan disbursement stood at Tk 247.71 billion, marking an 11.86 per cent year-on-year increase from Tk 221.46 billion in the same period of FY25.
On a quarterly basis, the disbursement saw only 1.96 per cent rise in July-September FY26 from Tk 242.96 billion in the previous quarter, indicating a gradual and cautious recovery in industrial credit demand amid ongoing economic adjustments.
Bankers attribute such trends to tight liquidity conditions, higher interest rates, and cautious investment sentiment in the private sector.
In terms of recovery, industrial loan repayments showed a strong upward trend. The loan recovery increased to Tk 289.22 billion in July-September period of FY26, a sharp 41.06 per cent year-on-year rise from that of Tk 205.05 billion in the same quarter of FY25.
Recovery also improved steadily in earlier quarters, with banks collecting Tk 271.81 billion in April-June FY25, up from Tk 264.36 billion in January-March FY25, the BB data revealed.
In recent quarters, the highest amount of recovery was recorded at Tk 331.75 billion in October-December FY25.
The latest data showed an uptrend with the recovery reaching Tk 357.19 billion in October-December FY26, indicating sustained improvement in borrower repayment capacity and cash flow conditions.
On the other hand, the outstanding stock of industrial term loans stood at Tk 4.23 trillion in October-December FY26 compared to Tk 3.80 trillion in the same quarter of FY25, reflecting the continued expansion of the industrial credit base despite cautious disbursement trends.
Bankers and economists said the overall pattern of moderate disbursement growth alongside stronger recovery signals a shift toward more risk-conscious lending behaviour in the banking sector.
They noted that concerns over asset quality, elevated interest rates, and subdued private investment necessitated banks to maintain a cautious stance on fresh industrial lending.
However, the better recovery trend was seen as a positive development, which could gradually ease pressure on bank balance sheets and create space for renewed credit expansion to productive industrial sectors.
Dr. Masrur Reaz, Chairman of Policy Exchange Bangladesh, said the lending trends reflect a 'cautious but stabilising' credit environment amid liquidity pressure and high interest rates.
"Banks are lending more selectively due to asset quality concerns and sluggish domestic demand, which is keeping the disbursement moderate," he said.
He also termed such stronger recovery 'a positive signal'.
"Improving recovery is strengthening bank balance sheets and may support future lending," Dr. Reaz said.
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