Agrani Bank Limited: The Leading State-Owned Commercial Bank of Bangladesh

Overview

Agrani Bank PLC is one of the largest state-owned commercial banks in Bangladesh. Wholly owned by the Government of Bangladesh, it was created on 26 March 1972, in the first months of independence, from the Bangladeshi operations of two Pakistani banks. Its head office is at Agrani Bank Bhaban, 9/D Dilkusha Commercial Area, in Dhaka's Motijheel financial district. The bank operates 979 branches across all 64 districts of the country (2025) and is supervised, like all Bangladeshi banks, by Bangladesh Bank.

Agrani combines the reach of a mass-market state bank — it held deposits of Tk 113,029 crore at the end of 2025 and collected Tk 33,961 crore in remittances that year, among the highest totals of any Bangladeshi bank — with one of the heaviest bad-loan burdens in the state sector. Defaulted loans stood at Tk 28,616 crore at the end of 2025, equal to 35.52 percent of its total loans, a legacy of years of politically influenced lending that the bank's post-2024 leadership has been trying to unwind. Alongside Sonali Bank, Janata Bank and Rupali Bank, it is one of the four large state-owned commercial banks that dominate public-sector banking in Bangladesh.

History

Agrani Bank emerged from the reorganisation of banking that followed the Liberation War. Under the Bangladesh Banks (Nationalisation) Order 1972 (President's Order No. 26 of 1972), the government combined the East Pakistan assets and liabilities of Habib Bank Limited and Commerce Bank Limited into a new nationalised bank, which began operating on 26 March 1972 with 249 branches and M. Fazlur Rahman as its first managing director. From 1977 the bank took on a growing role in agricultural and rural credit, building the large rural branch network that still distinguishes it from most private banks.

For three and a half decades Agrani operated as a state corporation rather than a company. That changed in 2007, when — in a state-bank reform programme that also covered Sonali Bank and Janata Bank — Agrani Bank Limited was incorporated as a public limited company on 17 May 2007. Through a vendor's agreement signed with the Ministry of Finance on 15 November 2007, effective retrospectively from 1 July 2007, the new company took over the business, assets, liabilities and goodwill of the old bank. The government retained full ownership. The bank is now styled Agrani Bank PLC.

Two later milestones widened its mandate. On 28 February 2010 Agrani became the first state-owned commercial bank in Bangladesh to offer Islamic banking, opening Shariah-compliant windows in five branches. It was also the first state-owned commercial bank to introduce agent banking, extending counter services into villages without a full branch. After the fall of the Awami League government in August 2024, the interim government replaced the bank's board and senior management as part of a wider clean-up of state-owned banks, and the bank's true level of defaulted loans — long suppressed by lenient classification — was progressively recognised over 2024 and 2025.

Ownership and Leadership

Agrani Bank is 100 percent owned by the Government of Bangladesh, with shares held by the government and its nominees; unlike Rupali Bank, it is not listed on any stock exchange. Its board of directors is appointed by the government through the Financial Institutions Division (FID) of the Ministry of Finance, and its managing director serves on a government-approved contract — an arrangement that has made leadership changes at the bank a recurring feature of changes of government.

The chairman is Syed Abu Naser Bukhtear Ahmed, who took office on 8 September 2024 on a three-year term and was still chairing the board at the bank's 19th annual general meeting on 30 August 2026. Ahmed is a former managing director of the bank itself, having led it from 2004 to March 2010 after being brought in from the private sector.

The managing director's office changed hands repeatedly in the mid-2020s. Md Murshedul Kabir, appointed in August 2022, had his contract cancelled in September 2024. His successor, Md Anwarul Islam, previously managing director of Rupali Bank, took charge in late 2024 and oversaw the 2025 recovery drive. In October 2026, in a broader reshuffle of state-bank leadership, the FID cancelled the remaining contractual terms of several state-bank managing directors, Agrani's included, and revised the eligibility rules for the posts. On 26 October 2026 the FID appointed Noor Mohammed, a deputy managing director of the private-sector Jamuna Bank, as Agrani's managing director and chief executive officer on a three-year contractual term, subject to board formalities and Bangladesh Bank clearance; the bank's chairman confirmed receipt of the appointment letter. Together with a parallel appointment at Janata Bank, it was reported as the first time in about twenty years that private-sector bankers had been chosen to head the big state banks.

Products and Services

Agrani Bank offers the full range of commercial banking services. Its deposit business spans current, savings and special notice accounts, fixed deposits and monthly savings schemes, and it is a major recipient of government and institutional deposits. On the lending side it provides retail and consumer loans, working capital and term finance for industry and trade, syndicated and project finance — including for power and infrastructure — and import and export finance; import transactions alone totalled Tk 54,367 crore in 2025.

Two areas reflect its state-owned mandate. The first is agricultural, rural and SME credit, delivered through its rural branch network and its subsidiary Agrani SME Financing Company Limited. The second is remittance and government-payment services: the bank pays out government salaries, pensions and social safety net allowances, and channels expatriate remittances through its own overseas exchange houses and a wide correspondent network. Its capital-market subsidiary, Agrani Equity and Investment Limited, provides merchant banking services. Islamic banking is offered through dedicated windows — 60 branches by early 2026 — alongside conventional products.

Branch Network and Outreach

The bank's physical network is among the largest in Bangladesh. It operated 979 branches in 2025 (978 in September 2024), including 36 corporate branches and 43 authorised dealer branches licensed for foreign-exchange business, administered through circle and zonal offices. Roughly half of its branches are in rural areas, a pattern inherited from its agricultural-credit mandate.

Beyond branches, the bank had about 550 agent banking outlets by September 2024 and provides real-time online banking from all branches on a centralised core banking system. Overseas, its wholly owned remittance subsidiaries operate in the main labour-export markets: Agrani Exchange House Private Limited in Singapore (established 2002), Agrani Remittance House Sdn. Bhd. in Malaysia (established 2005), Agrani Remittance House Canada Inc. in Canada, and Agrani Exchange Company (Australia) Pty Limited in Australia, supplemented by correspondent banking relationships worldwide. This network underpinned remittance collections of Tk 33,961 crore in 2025, up 61 percent on the year before, for which the bank had earlier received a national Top Ten Remittance Silver Award for the second-highest collection among banks in 2024.

Financial Performance

Agrani's recent results show a large balance sheet, recovering operating earnings and a still-severe bad-loan problem. In 2024 total assets rose to Tk 128,106 crore, deposits to Tk 99,232 crore and loans and advances to Tk 79,037 crore, producing an operating profit of Tk 1,511 crore. In 2025, on figures disclosed at its annual general meeting, total assets grew 11.36 percent to Tk 142,661 crore, deposits rose 13.90 percent to Tk 113,029 crore — more than half of them low- or no-interest deposits — and operating profit rose 54.5 percent to Tk 2,334 crore, helped by cost control and the surge in remittance income. The advance-to-deposit ratio stood at 71.29 percent.

The asset-quality figures are far weaker. Defaulted loans were Tk 32,002 crore at the end of 2024 — 40.49 percent of all loans, contradicting any suggestion that the bank enjoyed unusually low non-performing loans. During 2025 the bank reported recoveries of Tk 10,234 crore from defaulted loans, and the defaulted stock fell to Tk 28,616 crore, or 35.52 percent of loans of Tk 80,573 crore, by the end of 2025. Most of that improvement, however, came from rescheduling (Tk 8,368 crore) rather than cash recovery (Tk 1,009 crore), and provisions remained a heavy charge, with the provisioning requirement reaching Tk 10,557 crore in 2025. Earlier disclosures underline the depth of the hole: at the end of 2023 the bank had a provision shortfall of about Tk 11,364 crore and a capital shortfall of about Tk 4,440 crore, its capital adequacy ratio was 4.57 percent against a 12.5 percent requirement, and it reported a small net profit that year only under Bangladesh Bank waivers. By June 2025 the provision shortfall was again about Tk 11,379 crore, and central bank figures reported in mid-2026 put classified loans at about Tk 32,133 crore, roughly 44 percent of the loan book, as stricter classification rules took effect.

Digital Banking

Digital services were historically a weak point for the state banks, and Agrani has been catching up. All of its branches operate on a centralised core banking system with real-time online transactions. Its mobile app, Agrani Smart Banking, offers account access, transfers and bill payment, and supports add-money transfers to the Nagad mobile wallet under an agreement with Nagad. Internet banking is available for retail and corporate customers, and agent banking points bring basic digital services to rural customers.

In January 2026 the bank agreed with Millennium Information Solution Ltd to upgrade the core platform for its Islamic banking business from "Ababil" to "Ababil NG", as the technology backbone for expanding Islamic banking windows from 60 branches to its entire branch network.

Challenges and Controversies

Agrani's central problem is the legacy of the years after 2010, when — according to extensive press reporting and the accounts of officials appointed after 2024 — its board and management, stocked with politically connected appointees, channelled loans to a narrow circle of influential borrowers. An analysis of the bank's own disbursement data reported that about 82 percent of its loans were concentrated among just 64 large borrowers holding around Tk 62,000 crore, and that nearly 52 percent of all loans had been issued through only nine branches in Dhaka. Chairman Syed Abu Naser Bukhtear Ahmed said on taking office in 2024 that about Tk 2,500 crore had been debited from the bank's nostro accounts abroad without the corresponding customer accounts being debited, remaining overdue for 735 days — an irregularity he described as a massive fraud. A core banking software procurement of nearly Tk 500 crore was also reported to have ended in failure amid bribery allegations.

Individual scandals punctuated this period. In June 2016 Bangladesh Bank approved the removal of managing director Syed Abdul Hamid after finding him responsible on 12 counts, including misuse of power and sanctioning loans in breach of banking rules, in connection with loan scandals of about Tk 792 crore. For years, lenient loan classification and regulatory waivers kept the published bad-loan figures far below reality; when classification was tightened after 2024, the default rate surfaced at around 40 percent. The bank was driven to suspend fresh lending in the last quarter of 2024 to concentrate on recovery, and its capital and provision shortfalls have repeatedly required forbearance rather than fresh government capital injections. The Anti-Corruption Commission has summoned bank officials in connection with specific loans, and recovery from the largest defaulters remains slow, as it does across the state sector: the finance minister told parliament in July 2026 that defaulted loans at the nine state-owned banks together stood at Tk 188,701 crore as of May 2026.

Corporate Social Responsibility

As a state-owned bank, much of Agrani's social role is performed through its ordinary business rather than separate philanthropy. It distributes government social safety net allowances — old-age, widow and freedom-fighter allowances among them — through its branch and agent network, work the bank has described as covering dozens of government projects worth thousands of crore of taka, provided free of charge. It has opened more than 1.5 million no-frills accounts for farmers with an initial deposit of just Tk 10, and channels agricultural credit, microcredit through its SME financing subsidiary, and loans for migrant workers. Through its corporate social responsibility programmes, reported in its annual reports, the bank also supports education, healthcare, disaster relief and green banking initiatives.

Outlook and Conclusion

Agrani Bank's immediate agenda is recovery and capital repair. The outgoing management set a target of cutting defaulted loans below 20 percent of the loan book by the end of 2026 — an ambitious goal given that reported figures were still rising under stricter classification in mid-2026 — and the arrival of a managing director recruited from the private sector in October 2026 signals the government's intention to professionalise the bank's leadership. Remittance growth, a low-cost deposit base and its unmatched rural network give the bank genuine franchises to build on.

Its longer-term structure, however, is a policy question. In January 2026 the governor of Bangladesh Bank announced that the government planned to merge the nine state-owned banks into two large institutions, building on an earlier central bank recommendation that weak state banks be merged into stronger ones such as Sonali Bank; no merger involving Agrani had been decided as of late 2026, and the governor himself suggested consolidation might fall to a future government. Whether Agrani is merged, recapitalised or reformed in place, its future will be determined less by its large deposit base than by whether it can recover or resolve the concentrated, politically connected loans that have defined the last decade of its history.