The government of Bangladesh now owes commercial banks over Tk4,000 crore in unpaid remittance incentives, raising alarms over the sector’s profitability and liquidity management. The delays have intensified financial pressures, particularly on medium and smaller banks, which are more vulnerable to cash-flow constraints.
Under the government’s remittance incentive scheme, banks provide a 2.5% cash incentive to migrant workers’ families for every remittance received. The government subsequently reimburses banks through Bangladesh Bank. However, reimbursement has effectively stalled for nearly three months, forcing banks to draw on their own funds to maintain payments.
A senior official from the Ministry of Finance revealed, “By November 2025, arrears had reached approximately Tk3,500 crore. In December alone, the unpaid amount grew by roughly Tk500 crore.” Migrant remittances during the first 17 days of December amounted to USD 20 billion, further heightening pressure on banks to honour incentive commitments.
Economist Zahid Hussain warned, “Banks are effectively shouldering a government subsidy without a defined framework. Continued delays could result in serious operational and financial challenges.”
The following table summarises outstanding incentives at major banks as of 30 November 2025:
| Bank | Outstanding Arrears (Tk Crore) |
|---|---|
| City Bank | 185 |
| BRAC Bank | 445 |
| Trust Bank | 400 |
| Pubali Bank | 160 |
| Total | 1,190 |
Bank officials note that reimbursements used to be settled within one month. Now, delays of three to five months are common, compelling banks to mobilise their own liquidity to fund incentives. This restricts investments in high-yield opportunities, including 364-day treasury bills at 10.72% interest.
For instance, a USD 100,000 remittance (at an exchange rate of Tk122.30 per USD) creates a bank liability of over Tk1.25 crore, which must currently be funded internally. Medium and smaller banks face disproportionate strain compared with larger institutions. Seyed Mahbubur Rahman of Mutual Trust Bank and Mohammad Ali of Pubali Bank emphasised that prolonged delays complicate fund management and disrupt service to remittance recipients.
Bangladesh Bank spokesperson Arif Hossain Khan reassured that, despite the delays, all outstanding incentives will be settled, stressing there is no risk of permanent default.
Analysts argue that the government must urgently reassess its incentive fund management and expedite arrears clearance to prevent long-term stress on the banking sector, particularly as remittance inflows continue to rise and subsidy obligations expand.