---

Industrial term loan disbursement recorded solid year-on-year growth in the first quarter of FY26, even as banks maintained a cautious lending stance amid high interest rates and subdued private investment, according to central bank data.

Banks disbursed Tk 247.71 billion in industrial term loans during the July–September quarter, up 11.86 per cent from Tk 221.46 billion in the same period of the previous fiscal year. On a quarter-on-quarter basis, disbursement rose 1.96 per cent from Tk 242.96 billion in April–June FY25, pointing to a gradual improvement in credit flow at the start of the fiscal year.

However, lending momentum remained softer compared with the October–December quarter of FY25, when industrial loan disbursement reached Tk 310.82 billion, indicating a slowdown after a stronger finish in the previous year.

On the recovery side, banks posted a sharp improvement. Industrial loan recovery climbed to Tk 289.22 billion in the July–September quarter of FY26, marking a 41.06 per cent increase from Tk 205.05 billion recovered a year earlier. Recovery has remained on an upward trend over recent quarters, after reaching Tk 331.75 billion in the October–December quarter of FY25.

The recovery figure had stood at Tk 271.81 billion in April–June FY25, up 2.82 per cent from Tk 264.36 billion in January–March of the same fiscal year.

Despite the moderation in fresh lending, the outstanding stock of industrial loans remained substantial at Tk 3.99 trillion at the end of the July–September quarter, underscoring the sector’s central role in the banking system’s credit portfolio.

Bankers and analysts said the combination of moderate disbursement growth and stronger recovery reflects a more risk-aware lending approach, driven by concerns over asset quality, elevated borrowing costs and cautious investment sentiment. They added that sustained improvement in recoveries could help strengthen bank balance sheets and create room for fresh lending to productive industrial activities in the coming quarters.

Syed Mahbubur Rahman, managing director and CEO of Mutual Trust Bank, said disruptions in certain sectors, including the recent LPG cylinder crisis, had temporarily affected market operations and slowed business activity. He stressed that restoring energy security and maintaining law and order would be critical to rebuilding confidence among businesses and consumers.

Despite these challenges, he said new investments are still taking place, albeit at a slower pace, supporting job creation. He also noted that some readymade garment exporters are performing well, helping sustain export earnings and employment.

With improvements in energy supply and overall business conditions, industrial lending could regain momentum, he added, noting that restructured demand or forced loans may also contribute to future term loan growth.