Bank loan rescheduling rises Tk1,922cr in Jan-Sep
Bankers noted that under the ousted Awami League government, concessions were provided to reduce the exposure of defaulters, with the loan rescheduling policy simplified and the process delegated to banks in 2022, leading to a significant increase in rescheduling
In the first nine months of 2024, rescheduled defaulted loans in the banking sector increased by Tk1,922 crore, with bankers attributing the increase to a significant rise in fresh non-performing loans.
According to data from the Bangladesh Bank, banks rescheduled loans totalling Tk20,732 crore from January to September last year, an increase from Tk18,810 crore in the equivalent period of 2023.
Despite the rise in rescheduling, non-performing loans in the banking sector are growing rapidly, with the total standing at Tk2.85 lakh crore, or nearly 17% of the country's outstanding loans, estimated at Tk16.83 lakh crore, as of September 2024.
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Bankers noted that under the ousted Awami League government, concessions were provided to reduce the exposure of defaulters, with the loan rescheduling policy simplified and the process delegated to banks in 2022, leading to a significant increase in rescheduling.
They also noted that a 10-12% down payment was once required for rescheduling, but former governor Abdur Rouf Talukder delegated rescheduling to banks upon his arrival at the central bank, reducing the down payment to just 2-4%.
According to Bangladesh Bank data, private sector banks rescheduled the highest amount of defaulted loans in the first nine months through September, totalling Tk17,936 crore, followed by state-owned banks with Tk1,650 crore, and specialised banks with Tk1,120 crore, while foreign banks rescheduled no loans during this period.
Mosleh Uddin Ahmed, managing director and CEO of Shahjalal Islami Bank, told The Business Standard that traders are facing pressure due to rising interest rates on loans and increased gas and electricity prices, leading to higher expenses without corresponding income growth.
Additionally, some banks are unable to provide loans, leaving traders in crisis and forcing them to reschedule defaulted loans, he further said.
The seasoned banker also mentioned that the previous government concealed much information about the banking sector, but the current government aims to uncover the truth.
"Without political pressure, the central bank is revealing hidden issues, with the governor already stating that defaulted loans will exceed 30%. As a result, rescheduling has increased and will continue to rise," he added.
